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 Election is made. This election can only be made if the original return rejected with reject code SEIC-F1040-501-02 or R0000-504-02. Returns transmitted with the Imperfect Return Election 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 with the Imperfect Return Election, 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 with the Imperfect Return Election 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 Imperfect Return Election. 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.
To make the Imperfect Return Election in the tax program, from the main menu of the tax return select:
- Personal Information
- Other Categories
- Enter hidden Option 15 (or, 16 depending on the year)
- Select Yes when asked if you want to send the return electronically as an imperfect return.