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Form 2290 is, without a doubt one of the most important tax forms that truckers, owner-operators, and fleet managers deal with. The form will report the Heavy Vehicle Use Tax or HVUT for those vehicles that weigh more than 55,000 pounds and use public highways. Filing this form with the IRS each year is very important before the tax payer receives the Schedule 1 that acts as proof of tax payment. However, despite its being a routine process of filing the Form 2290, many submissions face rejections. Knowing why such happens and how you can correct that quickly will save trucking businesses precious valuable time, money, and headache.
Rejections frequently happen due to very common mistakes or issues that could easily be avoided. Here are the key reasons why Form 2290 gets rejected:
The most common reason for rejections is a mistaken VIN. An errant keystroke - something as innocent as one missing or miskeyed character - will cause the form to be rejected. As VINs are such a complex configuration of letters and numbers, even a minuscule error will initiate a mismatch in the IRS database. Because many fleet managers work with large volumes of vehicles, these errors are more commonplace than you might realize.
Each filer is to enter his EIN on Form 2290. The EIN used, if not reported to the IRS and either new (less than 15 days old) or does not match IRS records, then associated rejection flags may apply. The business name not matching the EIN is also a source of rejections. The IRS looks well and strongly for any mismatch in its record; thus any such inconsistency leads problems.
Form 2290, when filed for a specific tax period, but mentioning the wrong period is one of the most common reasons for rejection. For example, filling the form with an incorrect tax year and another while adding a new vehicle may be a disastrous burden on the entire filing process. Moreover, if Form 2290 is submitted past the due date, which is usually August 31 for most filers means not only rejections but also penalties and interest charges.
Fleet managers sometimes end up facilitating duplicate filings for the same vehicle or re-file incorrectly without realizing the same. Duplicate filings may be a result of anxious users, who do not receive a confirmation immediately, resubmit the form. The IRS automatically rejects them by marking them as duplicates.
Form 2290 is so specific in its calculation and payment of HVUT. Calculation errors in the tax, wrong categories of weight, and a wrong bank account may result in rejection. Errors in payee details at the time of submission result in rejection but also delay receipt of a validated Schedule 1.
A rejected Form 2290 creates undue stress that can be eliminated more quickly by resolving it quickly. Here is what you should do if your form is rejected:
When the IRS rejects a filing, they usually send a detailed rejection notice with a code or message indicating why it was rejected. Read this notice carefully to identify what went wrong. When you know what to correct, you can take the right step to rectify the error.
For example, if the rejections are due to the wrong VIN, then it will identify the VIN responsible hence getting them easier to determine where one can correct it.
Once the error is established, one needs to correct that. If the notice of rejection states that the information provided is incorrect VIN, EIN or a tax period, then one just corrects that and resubmits the form. Many good e-file services have the facility to amend and resubmit a rejected return free of cost so it is easy to correct.
Wait for 15 business days for errors of a newly issued EIN before resubmitting your return to allow the updating of the IRS system that your EIN is effective on the date stated on the notice.
Make sure to check everything over again after you ensure that "submit." Check the VIN, EIN, tax period, business name, and even all the details about payment. It will save you from several rejections, which might otherwise consume so much of your precious time.
If the reason for rejection is not known or the issue persists at over one attempt, contact the IRS customer service. They can be very useful in solving your problem and walking you through how you may rectify it. For business owners with large fleets, reaching out to the IRS directly helps prevent small errors from compiling to become compliance nightmares.
A proactive setting of measures in your fleet's compliance processes would save you from potential rejections in the future. To avoid making the same mistakes in the future, here are some general guidelines:
Form 2290 rejection could get quite frustrating with delays and complications, especially when the fleet manager has multiple responsibilities to care for. However, familiarizing oneself with common reasons for rejection and taking proactive measures against them can help avoid unnecessary stress in your trucking business. When such rejections do occur, it's best to handle them promptly by referring back to the IRS notice of rejection, making the necessary corrections, and resubmitting the form via a reliable e-filing service.
A disapproved form does not need to bring operations to a grinding halt for your fleet. With the right approach and reliable tools, you can resolve problems expediently and keep trucks moving without even a hitch. Just remember that preparation, precision, and proactively employed compliance strategies are what it takes for smooth sailing when it comes to Form 2290 filings.
Note: For more information, visit IRS website
