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11825: Business Return or Extension - Perfection Period


Deadlines + Extensions

If I e-file a business return or extension before the deadline, and the IRS rejects it after the deadline, what can I do then?


To correct a business return rejection that occurs after the due date of the return, where the initial e-filing was timely, you have two choices. During the perfection period, you can either correct the return and re-transmit it or you can paper-file the return. A taxpayer (a large business) who is required to e-file may need an e-file waiver to paper-file a corrected return (see Notes below).

What is the perfection period?

The perfection period is a 5 or 10 day period of time during which you can "perfect" a rejected e-filing. Generally, the perfection period begins when a return or extension is transmitted timely and may extend beyond the due date of the filing. The length of the period depends on what you have e-filed. Deadlines are midnight, but we recommend that you file as early as possible to ensure a timely filing:

7004 and 8868 extension  5 days
1120, 1120S, 1065, 1041 and 990
 10 days

Pub. 4163. Page 57 states that the IRS "looks back" 5 or 10 days from the date of an accepted e-filing, determines the date of the earliest rejection during that period and attributes the accepted e-filing to that date. Thus, if the earliest rejection during the period is timely, the accepted e-filing is considered timely. Note that "the perfection period is never extended regardless of weekends, holidays or the end of the year cutoff."

Note: DRKPARSE and Drake B-ack errors do not qualify for the perfection period.

To re-transmit a corrected business return or extension:

  1. Figure the perfection period from the last timely filing of the return or extension.
  2. Diagnose, correct and re-transmit that filing.
  3. You must re-transmit the corrected return within the perfection period.
  4. You can re-transmit more than once during the perfection period.
  5. Any retransmission after the end of the perfection period results in a late filing

To paper file a corrected business return or extension:

  1. A paper return must:
    1. Have an e-file waiver if the taxpayer is required to e-file. The taxpayer must call the IRS e-help Desk, 1-866-255-0654, to advise that they have not been able to have their return accepted. The e-help Desk will provide an e-Case number to the taxpayer.
    2. Be postmarked by the later of the due date of the return (including extensions) or 10 calendar days after the date the IRS last gives notification that the return is rejected.
    3. Include:
      1. An explanation of why the return is being filed after the due date.
      2. A copy of the reject notification.
      3. A brief history of actions taken to correct the electronic filing.
      4. A note written in red at the top of the first page of the paper filing - REJECTED ELECTRONIC RETURN - (DATE). The date is the date of first reject within the perfection period.
    4. Be signed by the taxpayer.
  2. A paper extension must:
    1. Be postmarked by the later of the due date of the return, or 5 calendar days after the IRS last gives notification that the extension is rejected. A taxpayer who is required to e-file a return is not required to e-file an extension, and an e-file waiver is not necessary.
    2. Include
      1. An explanation of why the extension is being filed after the due date.
      2. A copy of the reject notification.

Notes:

  • The information in this article is extracted from IRS Pub. 4163, Modernized e-File (MeF) Information for Authorized IRS e-file Providers for Business Returns.
  • Notice 2010-13 applies to taxpayers who are required to e-file - partnerships with 100 or more K1s, and some corporations, S corporations and tax-exempt organizations with assets of $10 million or more. "Notice 2010-13 provides that a taxpayer required to e-file can request a waiver from the electronic filing requirement when it cannot meet the electronic filing requirements. Before filing a paper return, corporations, partnerships and tax exempt organizations required to e-file must contact the e-help Desk (1-866-255-0654) to attempt to resolve the rejection conditions. If the rejection conditions cannot be resolved, these taxpayers must receive authorization from the e-help Desk before filing a paper return." (IRS Pub. 4163, p. 109)

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