I still remember the first time I filed taxes for my business. In addition to having no idea what a write-off really was, I also didn't worry too much about guessing on the numbers. A few government audits later, I discovered what it really meant to do things the right way. Over the years, I have met lots of business owners that weren't too worried about fudging the numbers, and nearly all of them have run into problems. Proper accounting is important, which is why I created this website dedicated to business accounting. I know that if you learn the right way to do things and focus on integrity, your business can avoid a world of problems.
Most individuals who e-file an income tax return receive a routine acknowledgment from the IRS shortly after the return is officially accepted. A small percentage of returns, however, are not initially accepted and receive a response containing a rejection code. Tax filers can usually correct the problem that caused the rejection and then e-file the return again or mail it if necessary.
The IRS provides different rejection codes to help identify specific issues with e-file attempts. Portions of the information on each individual income tax return is matched against records maintained by the Social Security Administration. Several of the most common rejection reasons revolve around issues with personal identification.
Incorrectly entered Social Security number
If just a single Social Security digit is entered incorrectly on your income tax return, it is likely to be rejected. Resolution of the problem is usually rather straightforward, requiring only the confirmation of all Social Security numbers listed on your tax return. Once the correction is made, the tax return is ready to be resubmitted.
Misspelled name
Even if all Social Security numbers are correct, a different rejection code is issued if any name entered on an individual income tax return does not sufficiently match records of the Social Security Administration. Compound last names should not be joined into a single word. A hyphenated name may need to be entered with a single space instead of a hyphen.
Some e-file rejections are due to different names being used on tax returns soon after a marriage or divorce. For tax purposes, couples married near the end of the year should consider waiting until after their first joint income tax return is filed to request a name change with the Social Security Administration.
Dependent already claimed on another return
On rare occasions, tax filers become frustrated to learn that someone else has already used the Social Security number of one of their dependents. In such a situation, the IRS issues only a reject code and does not identify who used the number. However, the other party is sometimes a former spouse or someone who knows the name and Social Security number of the dependent.
The e-filing option is not available for a tax return that lists a dependent who has already been claimed. With e-filing no longer possible, the only way to file the return is to mail a paper tax return. The IRS may then contact both tax filers who claimed a common dependent.
There are many other potential reasons for e-file rejections. Most accountants are authorized e-file providers and are familiar with the various codes. Contact an accountant from a firm like Alexander & Associates CPA for further tax preparation assistance.
Share13 October 2016
