The IRS has a processing issue that is triggering Schedule C, line 3, Gross Receipts Less Returns Allowances, reject incorrectly.

[danyjw01]

Hello, the IRS is rejecting my e-filing because of Schedule C, line 3. Did you figure out how to fix this? I have gone back and forth showing what I have is correct, I wondering is this is a glitch problem they are also having because I just can't figure this out. If you can help me, I would greatly appreciate it. TurboTax does not walk you through fixing this error. 

[tax_filer]

@danyjw01 To summarize the thread so far: TurboTax says the issue is on the IRS side of the submission process. Your e-filed tax return will be rejected until the IRS resolves the issue. Originally, TurboTax had a mid-March estimation for the IRS fix, but they have since removed this from the rejection explanation text and now there is no estimated date. 

So, what are your options:

1. Wait. If you are not pressed to file sooner rather than later, you can wait until the IRS issue is resolved and try to e-file again at a later date. 
2. Mail them in. If you have already attempted to file through TurboTax, you should be able to download a complete version of your tax return documents. Print those and mail them into the IRS. Information about where to send it can be found here: https://www.irs.gov/filing/where-to-file-addresses-for-taxpayers-and-tax-professionals-filing-form-1...

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Bonus option to help prevent this situation in the future: Contact your district representative and your senators.

• Tell them that the IRS had issues with their e-file technology this year that made filing taxes even more complicated than usual.
• Remind them that resources need to be allocated to the IRS so that they can have enough staff to manage their workload and improve their technology to support taxpayers.
• Encourage them to push the IRS to have an e-file pipeline that does not involve a third party like TurboTax so that we could take our return documents that TurboTax has already prepared and submit them ourselves.

[danyjw01]

Thank you so much tax_filer!!!

[MonaGayle1]

Thank you @tax_filer 

However, mid-march until the filing deadline is not much time.  Do you work for TurboTax?

I work in IT at a software company. There should be some type of escalation of issues to either Turbo Tax or the IRS.  When you say the thread said mid-march, where is this thread?  Is this thread just between users or actual persons at TurboTax or the IRS?

I am hard pressed to understand how the IRS strongly recommends e-file as the best option, and yet some users of the online software or purchasers of the software are unable to e-file.  

I also cannot understand how they have integrated the stimulus payments into the software, but an error this glaring is overlooked & not  quickly fixed. 

All users who are unable to efile should be refunded their purchase price for the software and the aggravation of having to be told to wait , and wait with no fix! 

[tax_filer]

@MonaGayle1 I agree. The filing deadline is quickly approaching and I'm not happy about it. I don't work for or have any affiliation with TurboTax, I'm just another person in the same situation as the rest of the folks in the thread who had their return rejected with this error. I actually in work tech as well. 

Both the original post and at least one other reply in this thread mention mid-March, but I was specifically referring to the message in TurboTax when you attempt to fix the return where it says the following: "The IRS has a processing issue that is triggering Schedule C, line 3, Gross Receipts Less Returns Allowances, reject incorrectly. You have two options: 1) You may wait to e-file your return at a later date when the issue is fixed (that date is currently unknown). 2) You may print and file your return by mail at this time." When I first filed at the end of February, it had said mid-March as the estimated date rather than "that date is currently unknown." The fact that they no longer have a date at all seems like a bad sign to me.

Believe you me, we are on the same page being frustrated by this. This is ridiculous, but it also sounds like it's not TurboTax's fault specifically. If an API is returning a bad response to valid data, the people maintaining the API (the IRS in this case) have to resolve the issue, not the people trying to pass data to it. I have no idea if that is really what's happening here, but that's the way I've been interpreting things with my developer brain. The IRS is notoriously underfunded and understaffed so resolving bugs in a timely manner may not be possible. Like I suggested in my last post, I definitely recommend pushing your national reps to try to change this.

All that said, even if it's not really their fault this time, a refund or something would be a nice gesture from TurboTax given the inconvenience. That and the fact that much of way tax filing works today is the result of lobbying from companies like TurboTax, so in a way, this is kind of their fault... 

[Lnk1979]

I believe we will need to move forward with a new company this tax season. No other tax software provider is having this issue and TT doesn’t appear to be committed to making certain that their tax forms are properly update so that they will transfer to the IRS without issue. If everyone were having the same issue with all electronic software, I would believe it to be an IRS issue. Right now all fingers point back at TT.

[LadyGourmet]

Hey Folks.... circling back on this HOT TOPIC.

For everyone tracking and following this issue - found another Tax Expert posted thread on this forum.  She gave precise instructions on how to 'fix' this issue so the IRS would not reject the transmission.  I made the suggested changes, resubmitted and my forms were accepted by the IRS. 

https://ttlc.intuit.com/community/taxes/discussion/the-irs-has-a-processing-issue-that-is-trigger-sc...

GREAT - to continually come back to this thread and see that I was not the only one going thru this.  And YES - I also got thru to the IRS and this is an issue on their side.  Other tax preparers were performing this HACK (best way I could put it) to get eFile transmissions thru.

Took me over a month to get it resolved...but it beats mailing in my forms any day.

GOOD LUCK!

[tax_filer]

@LadyGourmet I could kiss you haha. It will take a few days to know if my return has been officially accepted, but this didn't result in an immediate rejection like the last few times. Thank you for posting the link and for confirming the issue was really with the IRS. 

For the sake of putting the information in more places the "hack" is essentially to modify your Schedule C form to remove any Rebates and Refunds listed under the income section and add them instead to the expenses section under Miscellaneous Expenses. Your net income should be the same after this change. 

See the link in LadyGourmet's post above if you want to see it explained in a little more detail by an "Employee Tax Expert" who has more tax cred than me. 🙂  

[danyjw01]

Hi LadyGourmet, are you able to tell me how to get my taxes processed due to the trigger issue? I copied and pasted the link you provided but I couldn't pull anything up. If you could assist me, it would be greatly appreciated. 

[MonaGayle1]

@tax_filer I am still having the issue, and for some reason the link posted under @LadyGourmet original post will not open for me.  I am at my wits end.  

Have done all the steps note, but still am getting the reject, but when I run the Smart check, I am not seeing errors. 

[tax_filer]

@danyjw01 I think there were some extra characters at the end of their original link that made it not work, try this one: https://ttlc.intuit.com/community/taxes/discussion/the-irs-has-a-processing-issue-that-is-trigger-sc...

Other folks have continued the discussion about how to fix the Schedule C error over there, so hopefully that helps. 

[tax_filer]

@MonaGayle1 It looks like from the other thread you said you were using the home and business version. I'm not and I'm not sure if there are interface differences, so I'm reluctant to give much specific guidance for that part at least. 

I don't know what your business tax details look like this year, but my issue was resolved because I no longer had a value for line 3 after making the changes. I didn't make additional income through my self employment this year, but I had a refund I needed to report. Because I had no income and a refund listed on line 2, my value for line 3 was negative. I don't know if the negative value in line 3 is the problem or just any value there is a problem with the IRS. However, by removing my refund entry from the Income section of the form on line 2 (also referred to as Income in my version of TurboTax) and just reporting it as another expense, I no longer had any income data to report, so my entire income section on the Schedule C form, including line 3, is blank. 

Does any of that help relate to your own tax situation?

[danyjw01]

tax_filer, I followed what you posted to get past the error and it worked!!! My taxes were accepted!! I'm so glad I found this discussion group!!! Thank you so much...

[tax_filer]

@danyjw01 I'm so glad it worked! Congrats!! 😄

[KKim12]

Thanks! Let me try this and see how it goes!!