Why Would the IRS Reject Your E-filed Tax Return?

E-filing tax returns offers a convenient and efficient way to submit information to the Internal Revenue Service (IRS). However, taxpayers sometimes encounter rejections, which prevent their return from being processed. An e-file rejection means the IRS’s automated systems detected an inconsistency or error, requiring correction before acceptance. A rejection is not an audit; it indicates specific information on the return needs to be addressed and resubmitted.

Identity Verification Failures

A frequent reason for an e-filed tax return rejection stems from discrepancies in the taxpayer’s or spouse’s identifying information. This involves incorrect Social Security Numbers (SSNs) or Individual Taxpayer Identification Numbers (ITINs), name mismatches, or an inaccurate Prior Year Adjusted Gross Income (AGI). If the information submitted does not precisely match what the IRS or Social Security Administration (SSA) has on file, the return will be rejected.

Common errors include simple typos in an SSN or ITIN, or discrepancies arising from a name change due to marriage or divorce that has not yet been updated with the SSA. For instance, if a taxpayer recently married and changed their surname but has not updated it with the SSA, the e-filed return might be rejected because the name on the return does not align with the SSA’s records linked to their SSN. Another frequent issue involves the Adjusted Gross Income (AGI) from the previous tax year, which the IRS uses as a digital signature to verify identity for e-filing. If the AGI entered does not match the amount on file with the IRS from the prior year’s accepted return, the e-file will be rejected.

Filing Status and Dependent Claim Issues

Rejections can also occur due to errors in the chosen filing status or problems with claimed dependent information. Selecting an incorrect filing status, such as claiming Head of Household when the eligibility criteria are not met, leads to rejection.

Issues with dependent information are another common cause for rejections. This includes scenarios where a dependent’s Social Security Number, name, or date of birth does not match IRS or SSA records. A significant reason for rejection is when a dependent has already been claimed on another tax return, or when the dependent has filed their own return and claimed themselves. While the IRS generally rejects subsequent e-filed returns attempting to claim an already-claimed dependent, a new procedure for tax year 2024 and later allows e-filing if the primary taxpayer has an Identity Protection Personal Identification Number (IP PIN). Otherwise, if a dependent has been claimed by someone else, the return might need to be paper-filed after verifying eligibility.

Duplicate Filing Attempts

The IRS system is designed to prevent multiple submissions of the same tax return, leading to rejections for duplicate filing attempts. This typically happens when a taxpayer accidentally submits their return more than once, perhaps by using different tax software or by resubmitting after a previous rejection without properly correcting the issue. For example, if a taxpayer files electronically through one platform and then, due to confusion or an assumption of error, tries to file again through another, the second submission will be rejected as a duplicate.

Another instance of duplicate filing occurs when a taxpayer e-files a return and then also mails a paper copy for the same tax year. The IRS system flags these as attempts to file the same return multiple times, which can prevent proper processing of refunds or tax liabilities. If a rejection occurs due to a duplicate Social Security Number, it could indicate a simple data entry error or, in more serious cases, tax identity theft, necessitating immediate action such as contacting the IRS and potentially filing Form 14039, Identity Theft Affidavit.

Data and Technical Discrepancies

Rejections can also arise from broader data inconsistencies within the tax return itself or from technical issues during the e-file transmission process. This category includes missing required information, such as certain forms or schedules not attached, or income that was not reported. While tax preparation software usually identifies mathematical errors, some complex calculations or unusual entries might slip through and cause a rejection upon IRS review.

Technical issues can also impede successful e-filing. These might involve problems with the tax software, such as using an outdated version, or issues during the electronic transmission, like a corrupted file. Additionally, electronic signature or Personal Identification Number (PIN) discrepancies can lead to rejections if they do not match IRS records. These rejections indicate that the data received by the IRS system is either incomplete, unreadable, or does not meet specific formatting requirements, necessitating corrections.