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Some tax returns rejected by IRS due to late law change

Published: Wednesday, Feb. 20 2013 7:00 p.m. MST

When Congress finally approved the American Taxpayers Relief Act on Jan. 2, it forced the IRS to make changes to dozens of forms that many people use to file returns. Unfortunately, the IRS hasn’t corrected all the forms yet.

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SALT LAKE CITY — Rejection. It’s not easy to deal with, especially if it’s from the Internal Revenue Service.

Some earlier taxpayers who have filed electronically have had their returns rejected — and it wasn’t because of a mistake on their part.

When Congress finally approved the American Taxpayers Relief Act on Jan. 2, it forced the IRS to make changes to dozens of forms that many people use to file returns. Unfortunately, the IRS hasn’t corrected all the forms yet.

Salt Lake certified public accountant Jim Hoch with HEB Business Solutions is busy, as individuals and businesses are getting their 2012 income tax information together. He is working on returns every day and has many already completed. But sometimes when he tries to send in those forms, a screen pops up that says: “This return cannot be filed electronically.”

The problem goes back to the end of last year, when Congress was battling over the budget. When it was all over, tax laws got changed, which meant about 30 IRS tax forms needed to be corrected.

“And that caused the Internal Revenue Service to reprogram and to test certain forms that individuals will use when they file their 2012 tax return,” said IRS spokesman Bill Brunson.

Approximately 1,188,000 returns will be filed from Utah and more than a million will be filed electronically. He didn't know how many Utahns will be impacted by the delay.

“The individuals affected, generally speaking, file later in the year, later in the filing season and/or request an extension,” Brunson said.

Many of the forms have been updated already, but some are still in the process. This glitch primarily affects businesses, but individual taxpayers could get rejected too, especially if they are using forms regarding energy and clean fuel credits.

“So if you're expecting a credit for, say you put in an energy efficient appliance in your home, you may have to wait a couple of weeks in order to file,” Hoch said.

The IRS expects to have all the forms corrected by late February or early March. Updates are posted on its website IRS.gov.

The delay will mean some longer hours for accountants.

"I’ll have to fit a lot of work in that would have been done before today. I'll have to fit it in between now and April 15. Thank you Congress,” Hoch said with a laugh.

E-mail: kmccord@ksl.com

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