More on paper tax return woes
Some readers indicated that, with both TurboTax and H & R Block, after their e-file attempts were rejected more than once, representatives found a way to successfully e-file.
In a recent column, I wrote about my frustration after filing my federal tax return for 2019 on paper. Even though I filed it in April 2020 — before the deadline — the return has not been processed, and I can’t seem to get a straight answer from the IRS as to when it will be.
I have since received a great deal of feedback from readers. Some were CPAs and enrolled agents, but most were tax filers with similar experiences. They filed their 2019 tax returns on paper in a timely fashion and are still waiting for their refund. Many sent their returns in by registered mail with return receipt requested, but they never received a receipt.
Even some who did receive a refund were unable to obtain a copy of their return. As a result, when they tried to e-file their 2020 return, in many cases they were rejected by the IRS because the value for 2019 AGI they entered did not match information held by the IRS. As a result, they had to file a paper return for 2020.
Several CPAs have indicated that I was misinformed by TurboTax regarding the ability to e-file a 2019 return after October 2020. It is true that for a period of time, the IRS would not process 2019 returns by e-file because of regular maintenance. However, after that period and now, the IRS can accept e-files of 2019 returns.
I have pointed out that my e-file for 2020 was rejected because the value for 2019 AGI I submitted did not match the IRS records.
TurboTax representatives suggested that I enter zero for my 2019 AGI, and that was rejected as well. TurboTax representatives indicated I would have to file my 2020 return by mail again, but I am considering other options to refile electronically. Some readers indicated that, with both TurboTax and H & R Block, after their e-file attempts were rejected more than once, representatives found a way to successfully e-file.
Many CPAs and tax preparers have indicated that there are options to e-file without having to use AGI. For example, H & R Block representatives have indicated that if you allow them to prepare the E-file return — as opposed to using their software options — they can e-file without the need to enter an AGI for the prior year. Naturally, if you choose the option of having a representative of H & R Block prepare your e-file return, the cost of preparing will be much higher than using their software yourself.
Other CPAs have told me that they use different software that does not require the use of AGI. If you are using a preparer, you can ask whether AGI is required in order for your e-file to be processed.
Another preparer suggested that individuals can use the free-file option available from the IRS. Although it is free, you would be required to provide AGI information. This is the only free option available from the IRS for taxpayers with AGIs greater than $72,000.
Those with low/moderate income and who are 50 or older who want to e-file can use tax aide services from AARP. It does not require referencing the prior year’s AGI. Volunteer Income Tax Assistance (VITA) is another free service for those with incomes of $56,000 or less (1-800906-9887); VITA does require prior year AGI.
If you expect a refund quickly for your 2020 return, you should definitely try to e-file. Even in 2021, it is likely that IRS will not process paper returns in a timely manner.