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How to avoid a tax filing rejection if last year’s return is pending

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The IRS is backlogged and still sifting through tens of millions of pending returns, including many of last year’s filings. If your 2020 return is part of the pileup, there’s a special step for your 2021 electronic filing.

The agency processed more than 61.9 million returns as of March 11, with the majority filed digitally and roughly half self-prepared, the IRS reported.

When you self-prepare electronically, the IRS validates your filing with the previous year’s adjusted gross income. However, there’s a different process for the millions of filers with a pending 2020 return.

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If last year’s return is still in limbo, you’ll need to enter $0 for your 2020 AGI when filing online, said National Taxpayer Advocate Erin Collins in a hearing with the House Ways and Means Oversight Subcommittee.

“That way you can file electronically, and you don’t have to file a paper return,” she said. “We need to get that message out to taxpayers.”

While these directions only apply to digital filers, the agency urges everyone to file electronically with direct deposit to avoid delays.

Nearly 94.3% of individual tax returns were filed electronically during the fiscal year 2020, according to the IRS.

And there are similar instructions for non-filers, who typically include certain Social Security recipients or those with yearly income below the standard deductions.

If you used the non-filer tool in 2021 to collect the advance child tax credit payments or your stimulus check, the IRS says to put $1 for last year’s AGI.  

“I would think hardly anybody knows about that one,” said certified financial planner Larry Harris, director of tax services at Parsec Financial in Asheville, North Carolina.

If you don’t follow these instructions, the IRS may not accept your electronic return, said Tommy Lucas, a CFP and enrolled agent at Moisand Fitzgerald Tamayo in Orlando, Florida.

“We’ve seen that from individuals trying to file themselves,” he said, explaining how AGI conflicts may trigger a confusing rejection email from their tax-filing software.  

Missing 2020 returns

Your return may also be pending if you received a CP80 notice about a missing 2020 return.

If you got this notice and it still hasn’t been accepted, you should enter $0 for your 2020 AGI when filing this season, said Lucas.

“They’re going to show $0 in their system, so that’s what I would start with,” he said. 

But if the IRS rejects your return with a 2020 AGI of $0, they may have processed last year’s return after sending the notice, Lucas said, meaning you can refile your 2021 return with your actual 2020 AGI.

While it may be difficult to reach the IRS by phone, you can double-check the status of your 2020 tax return by downloading a free IRS transcript from your online account.



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IMF hikes global growth forecast as inflation cools

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The IMF has revised its global economic outlook upwards.

Norberto Duarte | Afp | Getty Images

The International Monetary Fund on Monday revised upward its global growth projections for the year, but warned that higher interest rates and Russia’s invasion of Ukraine would likely still weigh on activity.

In its latest economic update, the institution said the global economy will grow 2.9% this year — which represents a 0.2 percentage point improvement from its previous forecast in October. However, it said that number would still mean a fall from an expansion of 3.4% in 2022.

It also revised its projection for 2024 down to 3.1%.

“Growth will remain weak by historical standards, as the fight against inflation and Russia’s war in Ukraine weigh on activity,” Pierre-Olivier Gourinchas, director of the research department at the IMF, said in a blog post.

The Fund turned more positive on the global economy due to better-than-expected domestic factors in several countries, such as the United States.

“Economic growth proved surprisingly resilient in the third quarter of last year, with strong labor markets, robust household consumption and business investment, and better-than-expected adaptation to the energy crisis in Europe,” Gourinchas said, also noting that inflationary pressures have come down.

Global outlook is better but don't get too optimistic, IMF chief warns at Davos

In addition, China announced the reopening of its economy after strict Covid-19 lockdowns, which is expected to contribute to higher global growth. A weaker U.S. dollar has also brightened the prospects for emerging countries that hold debt in foreign currency.

However, the picture isn’t totally positive. IMF Managing Director Kristalina Georgieva warned earlier this month that the economy was not as bad as some feared, “but less bad doesn’t quite yet mean good.”

“We have to be cautious,” she said during a CNBC-moderated panel at the World Economic Forum in Davos, Switzerland.

The IMF on Monday warned of several factors that could deteriorate the outlook in the coming months. These included the fact that China’s Covid reopening could stall; inflation could remain high; Russia’s invasion of Ukraine could shake energy and food costs even further; and markets could turn sour on worse-than-expected inflation prints.

IMF calculations say that about 84% of nations will face lower headline inflation this year compared to 2022, but they still forecast an annual average rate of 6.6% in 2023 and of 4.3% in 2024.

As such, the Washington, D.C.-based institution said one of the main policy priorities is that central banks keep addressing the surge in consumer prices.

“Clear central bank communication and appropriate reactions to shifts in the data will help keep inflation expectations anchored and lessen wage and price pressures,” the IMF said in its latest report.

“Central banks’ balance sheets will need to be unwound carefully, amid market liquidity risks,” it added.



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Credit Suisse see Apple beating the Street this week for a few reasons

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Most Adani shares continue losses; founder loses $28 billion in month

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Gautam Adani, chairperson of Indian conglomerate Adani Group, at the World Congress of Accountants in Mumbai on Nov. 19, 2022. Founder Gautam Adani, the richest man in Asia and once second only to Elon Musk, fell out of the world’s top five richest to rank seventh on the Bloomberg’s Billionaire Index.

Indranil Mukherjee | Afp | Getty Images

Shares of most of Adani Group companies continued to see sharp losses for a third consecutive trading session as the company attempted to rebut short seller firm Hindenburg’s report, which accused the conglomerate of stock manipulation and an “accounting fraud scheme.”

Adani Enterprises erased earlier gains of up to 10% and last traded flat in Mumbai’s afternoon trade after the group published a lengthy response of over 400 pages to Hindenburg’s report over the weekend, saying that it will exercise its rights to “pursue remedies” to protect its investors “before all appropriate authorities.”

Adani Enterprises’ stock price remains more than 25% lower in the month to date, Refinitiv data showed. It proceeded with a secondary share sale worth $2.5 billion, which were overshadowed by a rout that wiped out a total of $48 billion as of last week’s close.

Founder Gautam Adani, the richest man in Asia and once second only to Elon Musk, fell out of the world’s top five richest to seventh place on the Bloomberg’s Billionaire Index.

His net worth fell $27.9 billion year to date, the index showed. It peaked at $150 billion on Sept. 20, 2022, before falling to to $92.7 billion as of last week’s close, according to the index.

Despite small gains seen in Adani Enterprises, other affiliates of the Adani Group continued to plunge.

‘Attack on India’

Adani Group said Hindenburg’s allegations were a “calculated attack on India, independence, integrity and quality of Indian institutions, and growth story and ambition of India,” in the response it released over the weekend.

The group’s chief financial officer Jugeshinder Singh said in an interview with CNBC-TV18, an affiliate of CNBC, that the value of Adani Enterprises has not changed “simply because” of share price volatility, adding it instead lies in its “ability to incubate new businesses.”

He added that he is confident Adani Enterprises‘ follow-on public offering will be fully subscribed, calling Hindenburg’s report “simply a lie” and the timing of the report “malicious.”

Hindenburg on Monday morning described the group’s response “bloated” and claimed it “ignores every key allegation” against the conglomerate that it raised.

“Fraud cannot be obfuscated by nationalism of a bloated response that ignores every key allegation we raised,” the short seller titled its response to Adani Group.



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