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A Solution for Taxpayers Whose E-File Attempts Are Rejected

By:
Ruth Singleton
Published Date:
Apr 6, 2022

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Many taxpayers who filed paper returns last year for 2020 are receiving rejections notices from the IRS when they try to file electronically this year for 2021, but there is a way to fix that problem, the Washington Post reported. These rejections arise because the taxpayers’ paper returns are still unprocessed because of the backlog resulting from the pandemic. Taxpayers who file electronically are asked to supply the adjusted gross income (AGI) from their most recent tax returns. But if their most recent returns are still unprocessed, the IRS system doesn’t recognize their AGIs. Thus their returns are rejected.

According to the Post, as of March 25, the IRS had 7.2 million unprocessed individual returns.

In January, the IRS posted tips for the 2022 filing season, including what taxpayers can do when they encounter this problem, but many taxpayers have missed the workaround. 

The IRS said, “People whose tax returns from 2020 have not yet been processed can still file their 2021 tax returns. For anyone in this group filing electronically, here’s a critical point: taxpayers need their Adjusted Gross Income, or AGI, from their most recent tax return when they file electronically. For those waiting on their 2020 tax return to be processed, make sure you enter $0 (zero dollars) for last year’s AGI on the 2021 tax return.”

Thus, the fix is to enter $0 (zero dollars) for the prior-year AGI.

The Post also suggested to taxpayers who used the non-filers tool last year—in order to register for an advance child tax credit payment or to claim the third stimulus payment—that they enter $1 as their prior-year AGI.

And taxpayers who filed an amended return last year can also try using the AGI from their original return. That’s because there’s a large backlog for amended returns as well. As of March 26, the IRS said it had 2.2 million unprocessed individual Forms 1040-X, which taxpayers used to add, change or correct information for an already-filed return. 

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