2021 1120-S E-file Rejcted after transmission was successful

[Islanderqi]

I just found out from speaking to an IRS agent today that they don't have my 2021 1120-S tax return. I told the agent that my TurboTax desktop shows the transmission was successful. During the call, I opened the 2021 TT softward, it showed the Federal return was rejected.  WTF!  Shouldn't TT email me with this important message.  Now I'm faced with a potential large penalty (per the IRS agent), but I won't know the dollar amount till I get submit the return via mail.

When I tried calling TT support to get answers on this issue, the system didn't understand what I was asking, and it just won't connect me to an agent (got disconnected by the automated system).  Anyone knows how to address this issue with TT?

[DoninGA]

While I do not have a copy of the 2021 Business Edition for Windows, the TurboTax Premier edition for 2021 shows in the File section of the program that it requests you to enter your email address to inform you when the e-filed tax return is either Accepted or Rejected.  I assume this would be the same in the File section of the TurboTax Business edition for tax year 2021.  

Can you check your email account for a notification from TurboTax in 2022 either in the email account or in the spam or junk mail folder that that an email from TurboTax was received?

[SteamTrain]

You could certainly call again, and keep trying...but I'm not sure they can do anything.

What you've experienced is what we keep saying in this forum over and over and over again every year.  After e-filing, come back into your tax file and check that it was "Accepted" a few days after you e-file.  A successful transmission just means it was sent...the IRS computers can still reject it for any of a myriad of reasons.

As far as TTX  notifications are concerned.

They DO send status emails.

1) But what happens if your account email was mis-typed by you?

.....then it goes to someone else, or to nowhere at all.   We get folks claiming they received such misdirected emails every year, simply due to someone who mistyped email addresses, with no way to track them down.

..or..

2) Sometimes overactive email SPAM detectors put the notice in your Junk folder.

Checking the status yourself ,within your tax file , a few days after e-filing....is the safest way to check that it was actually "Accepted"...and every person filing needs to do it religiously every year and not depend on any emails.

____

Sorry to hear you are in that position ....perhaps you can ask the IRS for penalty forgiveness...thru a local professional tax agent in your area.  (or maybe someone in this public Forum knows how it might be done)

[Islanderqi]

Thanks for the response. My email was in the system.  And I did receive an email showing transmission was successful. However, I didn't check the software later to make sure there weren't any issues, hence the mess I'm in.

[Islanderqi]

Thanks for your response.  No miss-typed on my part.  But like you said, I didn't check the system within days of my "successful transmission", hence the penalty I've to deal with.  I guess there was nothing successful about it!!

 A few issues heres:

1. The description of error says:"The return type indicated in the return header must match type established with the IRS for the EIN".  However, under the Federal Review tab, it shows NO ERRORS.

2. The message then suggested the following: "This reject is common the first time the return and/or extension is electronically filed for a corporate or s-corporate entity. The IRS e-file helpdesk can assist you in resolving the discrepancy which has caused this filing to be rejected."  Is Turbo Tax saying the problem is with the IRS, not TT's own software?

3.. Is this a software issue or an IRS issue since the the return was never accepted by the IRS?

3. The funny thing is that the IRS didn't realized that they never received my 2021 1120-S e-filed until we were discussing a separate matter on the 2023 return.

[JotikaT2]

Typically, if your return is rejected, you would have received notification that the federal return was not successfully transmitted.  The electronically filing error typically occurs if there is some sort of mismatch between your tax return versus the information the IRS has on file.  In your case, since it was a first year business return, this appears to be the reason that the federal return was rejected as evidenced by the error message you posted.  If you had tried to resolve the error, your final course of action would have been to mail in the tax return in.

Since you already in contact with the IRS, you might want to ask the agent you are in touch with to see if there is a way to send them the return directly so it gets processed while addressing your 2023 issue.  If this is not an option, I'd recommend mailing your 2021 federal tax return as soon as possible to avoid any further interest or penalties.

You might be able to request assistance from a Taxpayer Advocate using this link.  You can let them know your return was supposed to be electronically filed and you believed it was, but never received any notices from the IRS saying you were delinquent until you contacted them for your 2023 tax return.  They may be able to request some sort of abatement of those interest and penalties due on that business return.  It might not be possible but it doesn't hurt to try and request that assistance.

[Mike9241]

1. The description of error says:"The return type indicated in the return header must match type established with the IRS for the EIN".  However, under the Federal Review tab, it shows NO ERRORS.

if it was formed as a corporation, Turbotax has no way to know if you filed form 2553 to elect s-corp tax status was approved. Thus "No Errors" or you formed an LLC the needed to file both an entity election and form 2553 to be recognized as an S-corp for tax puposes.  Again, Turbotax would have no way of knowing whether or not these steps were successfully completed.  If you did file, and the IRS got the paperwork (tax forms to elect S-Corp) it should have sent you a notification that your S-Corp election was effective for the year beginning xx/xx/20xx

if you filed the 2553 election late and did not use the late election section, then the S-Corp would not be recognized until the following year. Again, Turbotax would have no way to know that an S-Corp return for the current year would be invalid.