IRS Computer Bug Rejects 40,000 Returns

The Internal Revenue Service’s electronic filing system rejected about 40,000 returns before a processing error was fixed late last week, the agency said. The IRS said the system refused to accept some returns that included a child-care credit or that reported dependent-care benefits. Instead, taxpayers got a message listing an “error reject code 090.” The bug is an embarrassment at a time when the IRS is urging taxpayers to switch to “e-filing.” One in four taxpayers used the system last year, and the agency is trying to meet congressional guidelines that call for 80% of returns to be filed electronically by 2007. The IRS said the problem is fixed and recommends that affected taxpayers retransmit their returns.