Every filing season, organizations lose valuable time correcting IRS rejections that were completely avoidable. Whether you file through FIRE or IRIS, understanding the most common rejection triggers can dramatically reduce risk, penalties, and operational headaches.
Here are the top five reasons information returns get rejected and practical steps to keep your filings clean:
1. Incorrect or mismatched taxpayer information
The IRS FIRE and SSA information systems automatically validate Name/TIN combinations. The most common reason for rejection is fairly simple: the Name or TIN you’re reporting does not match IRS records. Even small discrepancies can cause full-file rejections or B-Notices.
Common Errors:
- SSN or EIN for a contractor, employee, customer, or other recipient does not match IRS records
- Missing Tax Identification Number (TIN)
- Name formatting errors including extra characters, invalid characters, reversed name order, or missing suffixes
How to Prevent these Rejects:
- Run real-time or bulk TIN matching before filing
- Require validated W-9 or W-8 forms for every payee
- Standardize name formatting and maintain a clean vendor/payee master file
2. Missing or Invalid Data Fields
IRS filing systems reject submissions that don’t match the expected schema or layout for that tax year and form. Each form and filing method includes required fields that must be completed, and missing those fields will result in automatic rejections.
Common Errors:
- Form fields left blank (e.g., recipient TIN, amounts, account numbers, addresses, etc.)
- Incorrect form type (e.g., filing form NEC when MISC is required for the type of income being reported)
- Invalid characters or formatting errors such as incorrect field lengths or misaligned data elements in electronic files
How to Prevent these Rejects:
- Use up-to-date IRS schemas, specs, and business rules
- Use software with built-in validation to catch missing or invalid fields
- Ensure your accounting system exports fields in IRS-compatible formats
3. Invalid Income or Withholding Amounts
Files are often rejected when numeric values or formatting do not align with IRS rules, including cases where withholding is not calculated accurately or does not make sense compared to the income reported. These inconsistencies create logic errors the IRS cannot validate.
Common Errors:
- Negative amounts entered in fields that only require positive values
- Decimals used in fields that must contain whole dollar amounts only
- Amounts reported in certain boxes without the required corresponding fields
- Withholding amounts that do not align with reported income
How to Prevent these Rejects:
- Apply automated data validation checks on every record
- Lock down numeric field rules in your import templates
- Reconcile transaction totals and withholding logic before generating the IRS file
4. Missing or Incorrect Payer Information
The IRS may reject an entire file if payer-level details are missing or incorrect, since this information is the foundation of every submission. Even small errors in TINs, TCCs, or entity details can invalidate the full transmission.
Common Errors:
- Incorrect or missing Payer TIN or TCC
- Wrong entity codes or payer type classifications
- Incomplete payer address or contact information
How to Prevent these Rejects:
- Maintain a single, validated source of truth for all payer and entity profiles
- Confirm TIN, TCC, legal name, and entity type before generating the file
- Use software that automatically validates payer-level data against IRS requirements
5. Duplicate Submissions or Inconsistent Records Across the File
The IRS rejects files when it detects duplicates, incorrect correction logic, or mismatched totals, as these errors make it unclear which records are final and accurate.
Common Errors:
- Resubmitting an original file instead of marking it as a “replacement”
- Incorrect or missing links between original and corrected forms
- Summary totals that do not match detail-level income and withholding amounts
How to Prevent these Rejects:
- Implement a controlled submission workflow that tracks versions and transmission status
- Follow IRS rules for original, replacement, and corrected submissions
- Reconcile all summary totals with detail-level records before transmission to ensure consistency
How eFileMyForms Helps Reduce Rejected Filings
eFileMyForms is designed for small to medium sized businesses and CPAs that need an easy way to avoid IRS and state rejections.
Filing 1099s can be difficult enough; that’s why we’ve included many built-in features to make reporting season less taxing. Such as:
- Real-Time TIN Matching to prevent name/tin mismatches
- Easy-to-use form validations to ensure you input all required fields and fix any errors before filing
- Ability to select only the services you need and only pay for what you file
- Automated correction workflow
Get started with eFileMyForms today and make this your smoothest, most accurate reporting season yet. Create your account here.