Below are some of the most common reject codes that occur when electronically filing Form 1120. 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 1120 and has failed to mark the return as an amended return. Unlike a Form 1040, a Form 1120 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 1120 return, select Heading Information, Other Information, Amended Return and answer ‘YES’.
A sample reject when a previously accepted return has been filed follows:
| R0000-932-01 – If “Amended Return” or (Superseded for 1120/1120S/1120-F/1041) checkbox is not checked, then taxpayer TIN in the Return Header must not be the same as a TIN of a previously accepted electronic return for the return type and tax period indicated in the tax return. |
2. – Schedule K, Line 13 Response. When the return was electronically filed, the answer to Schedule K, Line 13 “Receipts and Assets at year end less than 250,000” was marked ‘NO’ in the return and the user failed to include on the tax return a Schedule L (Balance Sheet), a Schedule M-1 (Reconciliation of Income) and/or a Schedule M-2 (Unappropriated Retained Earnings). The corrective action for this reject code depends on whether the corporation’s assets and receipts are less than $250,000 at the end of the tax year.
If the corporation’s asset and receipts are less than $250,000 at the end of the tax year, change the answer in the Schedule K Menu – Other Information Menu, menu item 17 to ‘YES.’ In this case, Schedule L (Balance Sheet), Schedule M-1 (Reconciliation of Income) and Schedule M-2 (Unappropriated Retained Earnings) are not required and the return can be filed electronically.
If the corporation’s asset and receipts are greater than $250,000 at the end of the tax year, the Schedule L (Balance Sheet), Schedule M-1 (Reconciliation of Income) and Schedule M-2 (Unappropriated Retained Earnings) sections of the return must be completed before the return can be electronically filed.
A sample reject when Schedule K, Line 13 (Schedule K menu line 17) is marked ‘NO’ and a Schedule L (Balance Sheet) has not been included in the return follows:
| F1120-259-01 – If Form 1120, Schedule K, Line 13 does not have a choice of “Yes” indicated, then Form 1120, Schedule L, Line 15d must have a value. |
A sample reject when Schedule K, Line 13 (Schedule K menu line 17) is marked ‘No’ and a Schedule M-1 (Reconciliation of Income) has not been included in the return follows. This occurs when no Schedule M-1 has been completed. The corrective action for this reject code is to select the Schedule M-1 menu which will pull entries into the Schedule M-1 from the tax return and the Schedule L (Balance Sheet). Adjustments can be made to the Schedule as necessary.
| F1120-261-01 – If Form 1120, Schedule K, Line 13 does not have a choice of “Yes” indicated and Schedule M-3 (Form 1120) is not present in the return, then Form 1120, Schedule M-1, Line 10 must have a value. |
A sample reject when Schedule K, Line 13 (Schedule K menu line 17) is marked ‘No’ and fails to include a Schedule M-2 (Unappropriated Retained Earnings) follows. This occurs no Schedule M-2 (Unappropriated Retained Earnings) has been completed. The corrective action for this reject code is to select the Schedule M-2 menu which will pull entries into the Schedule M-2 from the tax return and the Schedule L (Balance Sheet). Adjustments can be made to the Schedule as necessary.
| F1120-260-01 – If Form 1120, Schedule K, Line 13 does not have a choice of “Yes” indicated, then Form 1120, Schedule M-2, Line 8 must have a value. |
3. – 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. |
4. – 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 but not filled out. 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.
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 *** |
5. – 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 1120) select Heading Information, Other Information, Name Change.
If the name of the corporation 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:
| F1120-307-01 – Filer’s TIN and Name Control in the Return Header must match data in the e-File database unless Form 1120, Item E (3), checkbox “Name Change” is checked. |
6. – Tax Year/ Fiscal Year Period Mismatch – This reject occurs when the tax year entered on the return does not match the Internal Revenue Service’s records. If the business operates on a fiscal year, the period end date must match the IRS records and unless it is the corporations initial return, must be for a twelve month period. The fiscal year for a corporation can be entered from the main menu of the 1120 return by selecting Heading Information, Fiscal Year.
If the fiscal year of the corporation has been accurately entered in the return, 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 Fiscal Year beginning date does not match the IRS records follows:
| R0000-080-01 – ‘TaxPeriodBeginDt’ present in the IRS Submission Manifest must match ‘TaxPeriodBeginDt’ provided in the Return Header. |
A sample of a reject when the Fiscal Year ending date does not match the IRS records follows:
| R0000-081-01 – ‘TaxPeriodEndDt’ present in the IRS Submission Manifest must match ‘TaxPeriodEndDt’ provided in the Return Header. |
A sample of a reject when the IRS records indicate that the corporation operates on a Fiscal Year follows:
| R0000-082 – ‘TaxPeriodBeginDt’ and ‘TaxPeriodEndDt’ must be provided in the IRS Submission Manifest. |