My Tax Return Was Rejected. What Do I Do Now?

Taxes are due this year on April 15. So if you haven't started your return yet, ideally you'll get working on it sometime soon. 

But what if you submit your tax return only to have it rejected? If so, don't panic. But be sure to know what steps to take next.

Why tax returns get rejected

The IRS will rarely reject a tax return due to incorrect math. Usually, the agency can reconcile math errors on its own. (It's worth noting that if you file your tax return electronically using tax software, you may be less likely to fall victim to math errors than by filing on paper. And that way, you won't hold up your refund.) 

Rather, the IRS usually rejects a tax return due to a glaring error that it can't correct on your behalf. These generally include:

• Putting down the wrong name (something that may happen if you accidentally enter your nickname instead of your given name)
• Entered the wrong Social Security number
• Entering the wrong filing status

Usually, these types of errors can be corrected electronically. The IRS will send you a notice by mail telling you what your options entail. Some types of errors, however, can't be fixed electronically, so in that case, you'll need to re-file your return by mail.

When there's identity theft at play

The above reasons for a rejected tax return may be aggravating. But a frightening reason for your tax return to get rejected is if someone stole your Social Security number, filed a tax return in your name, and diverted your refund to their checking account.

If your tax return is rejected due to a duplicate filing, you'll need to complete Form 14039, attach it to your tax return, and mail it to the appropriate IRS location in your state. You may also be able to submit that form online and mail in your paper return separately.

However, in that scenario, you'll also want to take steps to protect yourself financially. First, put a freeze on your credit so the criminal who stole your Social Security number can't then go and open new loans or credit card accounts in your name. 

Following that, check your credit report from each bureau (Experian, Equifax, and TransUnion) for fraudulent activity, like loans or lines of credit you don't recognize. You're entitled to a free copy every week, so you may want to do an initial check and a follow-up check a few weeks later.

From there, access your existing credit card accounts online and look for fraudulent charges. Also, log into your bank accounts and make sure you're not missing funds. Finally, visit IdentityTheft.gov so you can not only report the incident at hand, but also get a personalized recovery plan that may go beyond the steps outlined here. 

Having a tax return rejected can be frustrating. In many cases, the reason for it may be easy to rectify. But if your return is flagged as a duplicate and rejected because of that, make sure to follow the above steps to protect yourself financially.