IRS Rejections IND-031-03 and IND-032-03 With Deceased Taxpayer or Spouse

We have been unable to determine why returns containing a deceased taxpayer or spouse are being rejected by the IRS (with rejection code IND-031-03 when the taxpayer listed on the return is deceased and IND-032-03 when the spouse listed on the return is deceased). The IRS maintains that they are rejecting them correctly, however even when our customer is certain that the correct information is entered in the filing steps, their return can continue to be rejected.

These rejection codes are used by the IRS to indicate that the prior year information entered during the filing steps does not match the IRS records, however we have seen, when the taxpayer or spouse on the return is deceased, where they continue to receive these rejections even when we can verify for a customer (because they successfully e-filed the prior year using TaxAct) that the information they are entering is accurate.

We apologize for the inconvenience this IRS rejection is causing, however we transmit to them exactly what is entered in the return. If you are entering accurate prior year information in the filing steps and your return is being rejected, try the following instructions and if it continues to be rejected, the only option left is to paper-file the return (including any state return if applicable).

One thing that has worked for some of our customers in a similar situation is to try entering zero (0) for the prior year AGI for the deceased individual and not entering any prior year PIN for them (enter a zero (0) in that field to replace any number if it was imported from the prior year return). When you enter 0 for the prior year AGI, on a later screen, you will be prompted with a Red Alert where you will need to check Check the box if 2019 Adjusted Gross Income was zero. Once you do that, the Alert will clear. Note. Even though you are entering zero for your spouse's prior year AGI and not entering any prior year PIN for them, you would still want to enter your prior year AGI or prior year PIN. You would still enter a 2020 PIN (to represent your signatures on the 2020 return) on the screen titled E-Filing - Signature for both you and your spouse. If the return continues to reject after trying this, the only option is to paper-file so that information is included as follows.

Unfortunately (if you also have a state return to file), if the Federal return cannot be electronically filed (e-filed), there is not a way to e-file the state return.

To paper-file the Federal (and if necessary) state returns:

  1. From within your TaxAct return (Online or Desktop), click Filing to expand, then click Mail Paper Return. On smaller devices, click in the upper left-hand corner, then click Filing.
  2. The program will proceed with the interview screens for you to enter or review the appropriate information.
  3. At the end of the steps, you will be prompted to print the return and provided filing instructions (if you are printing a federal and state return, they will be on separate screens).

Before mailing the return(s), be sure to read the instructions. They will include important information such as where to file, what to attach to the return (i.e. W-2s, 1099s, etc.), refund or balance due, information about estimated tax payments, etc.