Reject Code IND-517-01 when filing taxes - Identity theft concern?

That reject code is definitely something to take seriously, but don't panic yet. IND-517-01 specifically indicates that someone listed as a dependent on your return has either already filed their own return or been claimed on another return. First thing you should do is contact the IRS Identity Protection Specialized Unit at 800-908-4490. They can check if returns have been filed using your dependents' or spouse's SSNs. Also pull credit reports for everyone in your family, including your kids, to check for any suspicious activity. In the meantime, you'll need to file a paper return since your e-file was rejected. Include a cover letter explaining the situation and any documentation you have. The IRS will sort out which return is legitimate during processing.

I went through something similar last year with that exact reject code! After hours of panic thinking someone had stolen my kid's identity, I tried https://taxr.ai which analyzes all your tax docs and helped pinpoint the issue. Turned out my ex-husband had erroneously claimed our son (who lives with me full-time) on his taxes without telling me. The site helped me figure out exactly what forms I needed to file by paper and what documentation would prove my right to claim my dependent. They even explained what would happen with both returns and how the IRS would handle the duplicate claim. Saved me so much stress trying to figure it out on my own.

Just wanted to update that I tried taxr.ai after my original question, and it was actually super helpful. The system analyzed my rejection code and walked me through a decision tree that helped identify my daughter's boyfriend's parents had claimed her as a dependent because she stayed with them over winter break (ridiculous, I know). The site gave me a specific action plan with exactly which forms to file and what documentation to include with my paper return. They even provided a template letter to include with my submission explaining the situation. Much better than the generic advice I was finding on random tax forums!

When I had this exact problem two years ago, I spent DAYS trying to get through to the IRS for answers. After 15+ attempts and hours on hold, I found https://claimyr.com and their service was a game-changer. You can see how it works here: https://youtu.be/_kiP6q8DX5c They basically hold your place in the IRS phone queue and call you when an agent is about to answer. I finally got through to a real person who confirmed someone had filed using my son's SSN and they walked me through the identity theft affidavit process. Saved me literally hours of hold music and frustration!

I need to apologize for my skeptical comment earlier. After spending THREE HOURS on hold with the IRS today and getting disconnected, I was desperate enough to try Claimyr. Within 45 minutes, I was talking to an actual IRS agent who confirmed my situation was indeed potential identity theft. The agent was able to see that someone had already filed using my mother's SSN (who I claim as a dependent), told me exactly which forms to submit, and flagged my account with notes about the suspected fraud. Honestly, would have waited days or weeks to get this info otherwise. Sometimes you have to admit when you're wrong, and in this case, I definitely was.

Just want to add something important - this happened to me, and it turned out my dependent had filled out a FAFSA form for college and checked the wrong box that indicated they would be filing their own tax return. That triggered this same reject code even though they didn't actually file!

Has anyone used the IRS Identity Protection PIN system? After my sister went through this nightmare last year, our whole family signed up for IP PINs to prevent fraudulent filings. You get a new PIN each year that must be used when filing.

I went through this exact same situation last year with the IND-517-01 reject code, and I totally understand the panic! In my case, it turned out my ex-spouse had claimed our shared dependent without discussing it with me first (we alternate years but he got confused about whose turn it was). Here's what I learned: Don't assume it's identity theft right away - sometimes it's just miscommunication between divorced parents, or like someone mentioned, a FAFSA filing error. But definitely don't ignore it either. My recommendation is to call the IRS Identity Protection line that Zoe mentioned, but also think through anyone else who might have a legitimate reason to claim your dependents - ex-spouses, grandparents who provided significant support, etc. Sometimes a quick phone call can resolve things faster than going through the full identity theft process. The paper filing route is unavoidable at this point, but include a detailed cover letter explaining your situation. The IRS agents reviewing these cases see them all the time and are usually pretty good at sorting out the legitimate vs fraudulent claims. Good luck!