There are multiple threads regarding this same rejection issue. Lots of people got hit, seemingly all as a result of the Feb 26 updates. My wife and I have Traditional IRAs. For years, we have taken partially taxable distributions and each have Form 8606 but have never had a problem. Specifically, our situation...
1. Yes Traditional IRAs
2. Yes Partially taxable distributions (non-zero basis) with 1099-R Box 7 Distribution code = 7.
3. Yes Form 8606s
1. No Inherited IRAs
2. No Roth, no Roth conversions
3. No IRA contributions
4. No Form 2210
We filed on Feb 26 with IRA and state (CA). Got rejected from Fed but CA is still "Pending".
