What Happens if I Have My Tax Return Rejected?

By Maurie Backman Markets Fool.com

Submitting a tax return typically means taking a huge weight off your shoulder. But not everyone gets to file a return and call it a day. Each year, the IRS rejects countless returns for a variety of reasons, and if yours contains a major error, you'll need to address it quickly.

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That said, having a tax return rejected is no reason to panic. As long as you fix your mistake and resubmit your return in time, you'll avoid problems with the IRS.

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Why do tax returns get rejected?

Tax return rejections are typically the result of typos or math errors. The IRS doesn't tend to reject returns that fail to report income; rather, it rejects returns that contain mistakes such as incorrect Social Security numbers or taxpayer names. (That's right -- it's not unheard of for a tax preparer to misspell a client's name or, worse yet, for a taxpayer to misspell his or her own name.)

The good news about rejected tax returns is that correcting them is generally very simple. If your return is rejected, the IRS will send you a notice informing you not just of the rejection, but of the issue that led to it. If you've filed your return online, you'll need to log in to access information on how to fix the problem, and from there, it's usually a simple matter of resubmitting the right information.

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In fact, some people have their tax returns rejected multiple times before they finally get it right. Though filing a return over and over again isn't ideal, rest assured that you can technically resubmit as many times as necessary until your return is accepted.

Common reasons for rejections

There are a number of reasons why a tax return might get rejected, the most popular of which include:

  • Entering an incorrect date of birth
  • Entering an incorrect Social Security number or TIN (Taxpayer Identification Number)
  • Entering the same Social Security number as another filer (if the IRS detects another return with the same number, it will reject a duplicate)
  • Entering the wrong adjusted gross income amount from the previous year's tax return (this could happen if you misplace your old return and guess at the number)

Most of these issues are fairly easy to fix, but it sometimes happens that the IRS has the wrong information on file. For example, it could be that you entered the correct Social Security number, but the IRS won't recognize it because its data is skewed. If you find that your tax return is rejected repeatedly for the same error, and you're certain you haven't made a mistake, you'll most likely need to file a paper return and include an explanation, along with proof of your assertion. (In the case of a Social Security number mismatch, you might include a copy of your Social Security card or other records verifying that your information is correct.)

Fixing a rejected return

If you do receive notice of a rejected tax return after the filing deadline, it's important that you act quickly. As long as you resubmit your return electronically within five days of being informed of a rejection, you won't face a late filing penalty. If you can't or don't want to correct your return online, you get 10 days to resubmit it by mail.

Tax return rejections happen more often than you'd think, so don't worry if yours is sent back. That said, you can avoid having your return rejected by double checking the information you enter on your original form. Sometimes, all it takes is a quick proofreading session to avoid a hassle down the line.

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