30 minutes after filing my personal (married-jointly) federal and state income taxes for 2020 I received the error condition IND-517-01implying a dependent SSN in my return had filed a return where the dependent's tax filing did not indicate they are dependent of my wife and I.
I have two dependents; my son and daughter. Only my son was required to file federal and state income taxes for 2020. We used Turbotax to create his 1040 and mailed in his return. Since we created my son's return with TurboTax we have a copy of the exact 1040 submitted. His filing clearly shows "Someone can claim You as a dependent" is checked !!
I can only think of 3 things gone wrong:
1) The IRS when processing his claim somehow did not observe my son's filing status as ""Someone can claim You as a dependent". 2) Some has fraudulently filed a claim against my son's SSN. 3) Some has fraud
fraudulently filed a claim against my daughter's SSN.
Thoughts on how best to resolve this error condition which we (my son, myself) has not caused?
Back story: My son's return was submitted 2/27/20. +7 weeks later the "Where's my Refund" had no record of his return. I called the IRS on 4/26. I am told, "we just received the return". My reaction: Huh? , it was sent in the mail 8 wks ago. I am told it will take 2-4 weeks for my son's tax refund to arrive. 3 days later my son's gets his electronic refund. And now I have the " IND-517-01" issue when I try to file my taxes. Something is definitely "off" at the IRS.
Part 2:
I reached the IRS this morning. Guess what, the IRS has my son's 1040 status as single/independent. Meanwhile I hold in my hand my son's 1040 form (created with TurboTax) mailed to the IRS that clearly shows "Someone can claim You as a dependent" is checked. Obviously someone at the IRS screwed up but of course it can't be fixed over the phone. The IRS rep has no access to the 1040 paper copy or any of it's images. Instead we must submit a 1040X form to fix this mess which takes up to 16 weeks to process per the IRS rep.
In the meantime, I can not e-file my 1040 because of error IND-517-01 implying my son's SSN is associated with a 1040 filing showing him as not a dependent. Wonderful. So either I put in for a length extension while the IRS takes its time processing the 1040X or I postal mail my 1040 and wait for the IRS to send me notifications over the next 1-2 months about my son's return indicating he is not a dependent until
the IRS internally corrects itself when processing the 1040X.
Moral of the story; e-file all future tax filings and pay the additional filing cost to avoid someone at the IRS
transposing or failing to enter your 1040 information correctly.