Rejection Handling

When filing tax forms using our API, it is crucial to handle rejections effectively to ensure compliance and avoid penalties.

Once you transmit the return, the IRS will process it and accept or reject it. In case your return is rejected, it’s important that you understand the reason, fix it, and re-transmit the return. This page outlines how to handle rejections for 1099, W-2, and 94x forms.

note

The software provider is responsible for informing the taxpayer of the rejection within 24 hours of receiving the acknowledgment from the IRS/SSA.

Rejection Response

Once the IRS/SSA processes your form, you’ll get a webhook notification (if configured for the event E-file Status Change). You can also use the Status endpoint to retrieve the status.

If your form was rejected, the response will include the status as ‘Rejected’ and the error message describing the reason for rejection. Here is a sample.

{
        "SubmissionId": "b870040d-fded-420b-b424-28bf0dd11261",
        "FormType": "FORM1099NEC",
        "Records": [
            {
                "RecordId": "5e2433ef-0d2e-4d8d-beba-06dac739a9fc",
                "Status": "Rejected",
                "StatusCode": 15,
                "FilingReference": null,
                "StatusTime": "2023-12-06T07:45:17.9647302-05:00",
                "RejectedBy": null,
                "Errors": [
                    {
                        "Id": null,
                        "Code": "ERR-SAMPLE-001",
                        "Name": "Sample Field",
                        "Message": "Sample Error Message",
                        "Type": "Error"
                    }
                ]
            }
        ]
    }

Handling Rejections

If your return gets rejected by the IRS/SSA, you can follow the steps below to retransmit them at no additional cost. TaxBandits API allows unlimited resubmissions until your return gets accepted.

1. Understand the Error - Based on the error message you received, identify the type of error that occurred.
2. Fix the Errors - Make the necessary changes in the form data by using the Update endpoint and ensure they are accurate.
3. Retransmit the Form - Once you’ve fixed the errors, you can use the Transmit endpoint with the same SubmissionId to retransmit the return.

Perfection Period

• When a return is rejected, there is a 10-day Transmission Perfection Period to perfect that return for electronic re-transmission. The perfection period will be 10 calendar days for any business return and cannot be extended further.
• The Transmission Perfection Period is not an extension of time to file; it is a period to correct errors in the file. It applies regardless of the date filed, due date, or extended due date.
• If the IRS accepts a previously rejected electronic return within the 10-day Transmission Perfection Period, it will be deemed to have been received on the date of the first rejection. The Period is actually a “look back” and is determined as of the date the return is accepted.
• The IRS looks back 10 calendar days from the date accepted (or from the Electronic Postmark, if applicable) to determine any rejects for the same EIN and Tax Period. If any rejections occurred within that period, the IRS uses the received date on the earliest reject (or the Electronic Postmark, if applicable) as the IRS-received date for the accepted return.

Common Rejection Reasons

Here are some of the common reasons for rejections.

1099 Forms

• Invalid TIN: The recipient name and TIN combination provided on the 1099 form do not match the IRS database.
• Missing Information: The form didn’t contain all the required information.

W-2 Forms

• Invalid Employee TIN: The employee name and TIN combination provided on the 1099 form do not match the IRS database.
• Invalid Employer EIN: The employer's EIN is invalid.
• Incorrect Wage Amounts: The wage amounts provided are incorrect.
• Incorrect Withheld Amounts: The withheld amounts provided are incorrect.

94x Forms

• Name Control Mismatch: The EIN and name control of the business do not match the IRS database.
• Invalid Bank Routing Number (RTN): The RTN provided on the form is invalid.
• Invalid Online Signature PIN: The online signature PIN provided on the form is invalid.