If a federal tax return is rejected for a dependent SSN/Name Control mismatch, the return can be re-transmitted and accepted by the IRS if the imperfect return indicator has been set. This indicator can only be made if the original return rejected with reject code SEIC-F1040-501-02 or R0000-504-02.
A return transmitted marked as an imperfect return will be acknowledged by the IRS with the acknowledgement code E (Exception).
Two caveats regarding imperfect returns:
- An imperfect return is not eligible for bank products. You will need to collect any preparation fees for an imperfect return up-front.
- An amended imperfect return must be paper filed. It will reject if e-filed.
Before re-transmitting a return marked as an imperfect return, we recommend working with the taxpayer to ensure that the correct dependent name and SSN have been entered in the tax return. Taxpayers can visit any Social Security Office and receive a printout of this information. The IRS will review any tax return transmitted as an imperfect return to verify the accuracy of the dependent information contained in the file. This review process will delay processing the return, and any refund will typically be processed 4-6 weeks after acceptance. If the IRS cannot verify the dependent data, the taxpayer may be disqualified from claiming the dependent and any refund may be reduced.
Note: The IRS will send a notice to the taxpayer advising them of any changes made as a result of the marking the return imperfect. Ensure that changes made by the IRS due to the election are corrected in the taxpayer's tax return so that the proper dependent information pulls forward next year.
Indicating a return is being filed as an imperfect return involves accessing a hidden menu option under the Personal Information menu, as follows:
- Select Personal Information
- Select Other Categories
- At the bottom right, enter the line number after the last line number in the menu, then press Enter. So, if the last line number in the menu is 15, enter 16. This takes you to a hidden menu option to mark the return as imperfect.
- Send Return Electronically as an Imperfect Return? - Select Yes.