Procedure for recovering from an IRS-rejected e-file (REJ ack code) — diagnose the rejection reason, fix the underlying issue in the tax software, re-export, re-transmit. Time-sensitive because rejection windows + tax-deadline pressure compound.

- IRS returns REJ ack code on a transmitted return (within 24-48 hours of submission) - E-File Status banner on engagement shows "REJECTED" with reason - Common rejection reasons: PIN mismatch, duplicate SSN, prior-year AGI mismatch, dependent SSN already claimed

- Primary owner: Tax Preparer who originally prepared the return - Tax Manager: approves any data corrections that affect return totals - Engagement Partner: notified for repeat rejections or close-to-deadline cases - Client: may need to confirm SSN, prior-year AGI, or other identity-verification data

- Engagement at "Filed" stage with REJECTED ack received - Access to firm's tax software (Drake / Lacerte / UltraTax / ProConnect / CCH Axcess) where return was originally prepared - Tax software credentials in Vault (M-027) if shared access

1. Open engagement → E-File Status tab (M-014); confirm rejection banner shows reason + ack code 2. Read rejection reason carefully — IRS rejection codes are specific (e.g. R0000-902 = duplicate SSN, IND-031-04 = prior-year AGI mismatch) 3. Diagnose root cause: - PIN mismatch → re-collect 8879 with correct PIN - Duplicate SSN → spouse/dependent SSN already used in another filing this year (ID theft risk OR data entry error) - Prior-year AGI mismatch → client's prior year AGI doesn't match IRS records; usually because of amendment or transcript discrepancy - Dependent SSN already claimed → another taxpayer (often estranged spouse) claimed the dependent first; resolve via paper-file with Form 8862 + dependency proof 4. If client data error (most common): correct in tax software → re-export Import File from ProDeskCPA (M-013) if changes affect organizer/Q&A data → re-import to tax software 5. If 8879 PIN issue: re-send 8879 with correct PIN via M-026; engagement returns to "Awaiting 8879" stage temporarily 6. If dependency dispute: this is OUT-OF-SCOPE for ProDeskCPA — must paper-file outside the system; document in engagement Notes; mark engagement "Filed by paper" 7. Re-transmit via tax software (NOT through ProDeskCPA — system doesn't transmit, just exports + tracks) 8. Update engagement: click Re-submit E-File button (M-014) → eFileStatus reset to TRANSMITTED; ack code field cleared pending new ack 9. Wait 24-48 hours for new ack; verify ACK = ACCEPTED 10. If accepted → engagement to "Filed"; proceed with invoicing per SOP-001 step 16

- If 3rd consecutive rejection on same return: ESCALATE to partner; consider paper-filing OR contacting IRS Practitioner Priority Service - If rejection is on April 15 / Oct 15 (tax deadlines): file 4868/7004 extension immediately if not already filed; correct AND re-transmit even if ack will come post-deadline - If client unreachable + data correction needed: do NOT re-transmit speculatively; wait for client confirmation - If state e-file rejected separately: federal can still be Filed; resolve state through firm's tax software state e-file system

- Rejection due to ITIN-not-yet-assigned: file Form W-7 paper application first; re-transmit when ITIN issued (may not be feasible same tax season) - Rejection due to prior-year IRS audit lock on SSN: client must file paper return; flag for partner - Re-transmit with no actual fix (transient IRS system issue): rare but can happen; usually resolves on retry without changes - Multi-rejection cascade (e.g. fix PIN, then SSN duplicate emerges): handle one error at a time; don't try to fix multiple speculatively - Rejection AFTER tax deadline (e.g. Apr 16 ack on Apr 15 transmission): the timely-filing deadline applies to the original transmission attempt per IRS rules — but document this carefully and consult IRS guidance for the specific year

- Time from REJ ack received → re-transmitted: target same-day for non-deadline; <24h for deadline-period rejections - Rejection rate (rejected / total filed): target <2%; persistently high rate signals upstream data quality issue - Repeat rejection rate (same return rejected 2+ times): target <0.5%

- Modules: M-014 E-File · M-013 Tax Software Export · M-026 E-Sign · M-011 Tax Pipeline · M-027 Vault · M-009 Tasks - SOPs: SOP-001 (new client onboarding) · SOP-005 (tax return prep workflow — predecessor) · SOP-008 (portal lock if invoice unpaid for completed engagement)

- ProDeskCPA TRACKS state ack status but state transmission still goes through firm's tax software (per FAQ) - IRS standard 8879 e-signature does NOT require KBA per Rev. Proc. 2021-47 — KBA failures are not a typical rejection cause - Common-cause rejection codes worth memorizing: R0000-500 (TIN mismatch), R0000-902 (duplicate SSN), IND-031-04 (prior AGI mismatch), F1040-526 (filing status conflict)