Below are some of the most common reject codes that occur when electronically filing Form 1065. In some situations, the return can be re-filed electronically after making a correction on the return or the return may have to be mailed to the IRS.
1. – Previously Accepted Return. The IRS has already accepted a return for this entity’s Employer Identification Number (EIN) and the IRS will not accept a second return electronically with the same taxpayer identification number. This generally occurs when the tax office has already transmitted this tax return and the reject is simply a duplicate filing. It also occurs when the preparer is attempting to amend the Form 1065 and has failed to mark the return as an amended return. Unlike a Form 1040, a Form 1065 can be amended and then electronically filed.
If the return should be filed as an amended return, the return can be corrected and re-transmitted electronically. To mark the return as an amended return, from the main menu of the 1065 return, select Heading Information, Other Categories, Amended Return and answer ‘YES’.
A sample reject when a previously accepted return has been filed follows:
|R0000-194 – Return must not be a duplicate of a previously accepted return.|
2. – Return Type Not Recognized. The IRS does not recognize the entity as having previously filed a Form 1065- US Partnership Return. This reject code will not occur when electronically filing an initial tax return filed by the entity. However, this reject code may appear in years subsequent to the initial filing.
Possible corrective action is to verify the previous filing type by contacting the IRS E-file Help Desk at 866.255.0654. If after contacting the E-File Help Desk it is determined that the return cannot be electronically filed, then a paper return must be submitted by mail.
A sample reject when the IRS does not recognize the Form 1065 Return Type follows:
|R0000-900-01 – The return type indicated in the return header must match the return type established with the IRS for the EIN.|
3. – Schedule B, Line 6. When the return was electronically filed, the answer to the Schedule B, Line 6 (Schedule B menu line 8) question “Does This Partnership Meet All Four Requirements?” was marked ‘NO’ in the return and Schedule L (Balance Sheet) was not included with the return. The Four Requirements are (1) whether the partnership’s total receipts were less than $250,000 for the tax year; (2) the partnership’s total assets were less than $1 million at the end of the tax year; (3) the Schedule K-1’s are filed with the return and furnished to the partners on or before the due date (including extensions); and (4) the partnership is not filing or required to file Schedule M-3.
If any of the Partnership Four Requirements are not met, the Schedule L (Balance Sheet) must be completed before the return can be re-filed electronically. Schedule M-1 (Reconciliation of Income) and Schedule M-2 (Analysis of Partner’s Capital Accounts) sections of the return should also be completed before the return is re-filed electronically.
A sample reject when Schedule B, Line 6 is marked ‘NO’ and fails to include a Schedule L (Balance Sheet) follows:
|F1065-048-01 – If Form 1065, Schedule B, Line 6 is answered “No”, then Schedule L must be present.|
4. – EFIN Not in Accepted Status – This reject occurs when there is currently an issue with the Electronic Filing Identification Number (EFIN) in the Internal Revenue Service’s (not Keystone Tax Solution’s) records. Verify that the correct EFIN is entered in the program. There are three places you will need to check. From the main menu of the program, select Configuration, Firm Information and verify the correct EFIN is entered in the menu. Next exit to the previous menu and select ERO(s) Menu. Verify that the correct EFIN is entered in the menu. Next, Exit to the Configuration Main Menu and select Electronic Filing/Bank Setup. Verify that the correct EFIN is entered in the menu. If the EFIN needed to be updated in any of the three menus, each tax return must be updated to reflect the change. To update the tax return, from the main menu of the return select Mark Return Electronic, Other Information. Select EFIN to update the EFIN in the return.
If the correct EFIN was used when the return was transmitted, contact the IRS E-File Help Desk at 866.255.0654 to update your EFIN status.
A sample of a reject when the EFIN is not in accepted status follows:
|R0000-905-01 – Electronic Filing Identification Number (EFIN) in the Return Header must be listed in the e-File database and in accepted status.|
5. – Document/Form Count not matching the return. – This reject occurs when the number of forms, schedules and supporting documents in the return count do not match the electronic record that is sent to the IRS. This occurs when a blank form or schedule is created during the preparation of the tax return, or the return is created without a required schedule or supporting statement.
To correct the reject, review the return in the View Results Menu. Look for any extra/blank forms that may have been created during the preparation of the return. These blank items increase the document count and need to be removed from the return before the return can be re-filed electronically. Also, view the supporting statements from the View Results Menu. All entries must have both a description and a dollar amount. If any entry is missing either the description or the dollar value, the information must be added, or the statement item needs to be removed from the return.
If any blank forms, schedules or documents are found on the return they should be removed before the return can be re-submitted.
A sample of a reject when the document count does not match because there is a blank form, document or schedule on the return follows:
|R0000-019 – The number of return documents (forms, schedules, and supporting documents) included in the return must equal the document count specified in the Return Data (documentCount attribute of the ReturnData element of the Return).
*** Additional Information: documentCount attribute- 3, Actual number of document found- 4 ***
6. – Name Control Mismatch – This reject occurs when the Name on the return does not match the Employer Identification Number in the Internal Revenue Service’s records. If the business has changed its name since it last filed with the IRS, the return can still be electronically filed by indicating on the return that a Name Change has occurred. From the Main Menu of the tax return (Form 1065) select Heading Information,Other Categories, Name Change or Change of Address.
If the name or address of the partnership has not changed, the preparer can contact the IRS E-file Help Desk at 866.255.0654 for assistance. If after contacting the E-File Help Desk it is determined that the return cannot be electronically filed, then a paper return must be submitted by mail.
A sample of a reject when the Name does not match the EIN follows:
|R0000-922-01 – Filer’s TIN and Name Control in the Return Header must match data in the e-File database unless “Name Change” or “Name or Address Change” checkbox is checked, if applicable.|