“Race to file” is not an Indy 500 racing term.
by Staff Attorney Angela Hale
Here’s a new word for you that’s gaining a lot of attention in the tax world: DUPTIN, which stands for Duplicate Taxpayer Identification Number. Why does this weird acronym matter to you? It could be the cause of your electronically filed tax return being rejected, leading to a “race to file” (e-file) your return. Let me explain.
What is the “race to file?” Ladies and gentlemen, start your engines. When you electronically file your tax return, the IRS computer is checking to make sure none of the Taxpayer Identification Numbers, or TINs (i.e. Social Security Number, SSN, or Individual Taxpayer Identification Number, ITIN), have been claimed yet on a tax return for that filing year. The computer is checking all of the TINs on the return for you, your spouse, and your dependent(s) to make sure they have not already been claimed on a return for that filing year. If any of those SSNs and/or ITINs have been claimed on an e-filed return already, your return will either be rejected or audited.
When does this happen? There are a couple of situations where this is common:
Tax identity theft, where someone files a tax return using your social security number to file a fraudulent tax return, usually to claim large, illegitimate refunds.
Multiple people trying to claim the same dependent, which usually occurs in cases of divorce or where someone other than a parent is raising a child.
What does this mean? If someone uses your social security number or claims your dependent(s), it means your e-filed return will be rejected.
What does it NOT mean? It does not mean you cannot file your return and/or claim legitimate dependents.
Unfortunately, it does mean you must paper-file your return. This can take months or even over a year to process, causing taxpayers to wait unnecessarily to receive much-needed refund checks, which can total several thousands of dollars if there are multiple Child Tax Credits and/or Earned Income Tax Credit.
What can I do? In the case of tax identity theft, you will want to set up an IP PIN (Identity Protection PIN) with the IRS. After you do this, anyone trying to use the associated TIN will be required to type in the PIN to e-file a tax return. The IRS mails a new IP PIN every year. You can set this up on www.IRS.gov. This can be done for both adults and minors.
In the case of multiple people claiming the same dependent, the easiest solution is to be the first to e-file. It is getting more difficult to “win” this “race to file” because tax software websites now will allow you to prepare your return ahead of time, and the company will submit it immediately when the filing season opens. In this situation, at 12:01 a.m. on the first day of filing season, it might already be too late.
If you “lose” this “race to file,” all is not lost. There are a couple of different things you can do. First, you can e-file the return without claiming the individual with the TIN at issue and then file a paper amended return claiming that individual to get the rest of the refund owed to you. Second, you can paper-file the whole return. If there are court orders or other legal papers, such as court-ordered custody or guardianship, that support your claim to the dependent at issue, you should include those with the paper-filed return.
Going forward, whichever option you chose, you can also get an IP PIN (discussed above) for the dependent at issue. One caution that is especially relevant with the IP PIN is to make sure the IRS always has your current address on file. If you move, you can submit Form 8822 with your current address. This will ensure that any audit or exam notices and your IP PIN are mailed to your correct address.
If you need help filing your tax return, there are several free filing options on the www.IRS.gov website, including IRS Free File and VITA (Volunteer Income Tax Assistance) sites.
If you need help getting a refund that is owed to you or any other legal tax help, please call to set up an intake with one of our tax attorneys at (317) 429-4146.