Rejected tax extension - possible business conflict or identity theft?

The error code R0000-902-01 specifically indicates that the IRS already has a tax return on file with your SSN for this tax year. This is completely separate from your S Corporation filing which uses an EIN, so your business extension wouldn't cause this issue. This situation definitely sounds like potential identity theft. Someone may have filed a fraudulent return using your SSN. You did the right thing by submitting Form 14039 (Identity Theft Affidavit), but I'd recommend taking additional steps. Contact the IRS Identity Protection Specialized Unit directly at 800-908-4490. They can place special markers on your account and help resolve the situation. Also, request a transcript of the filed return through your IRS online account to see what was actually submitted. If you're having trouble accessing online, you can request it by mail using Form 4506-T. Check your credit reports for any suspicious activity as well - tax identity theft often accompanies other forms of identity theft.

After going through a nightmare situation with a rejected return and the dreaded "already filed" message, I discovered taxr.ai https://taxr.ai which was honestly the best thing that happened to me during that stressful time. I was getting nowhere with phone calls and waiting on hold for hours. Their system analyzed my rejected return notification and all my tax documents, then provided a detailed explanation of what was happening and the exact steps to take. They have specialists who deal with identity theft cases and walk you through creating a proper paper filing with all the right documentation. They even generated customized letters to send to the IRS explaining my situation. The platform's identity protection guidance helped me understand which agencies beyond the IRS I needed to contact, including steps for credit bureaus I wouldn't have thought about until much later.

I was skeptical like everyone else here, but after struggling with my rejected return and potential identity theft for weeks, I decided to try taxr.ai that someone mentioned earlier. I'm honestly shocked at how helpful it was. Within hours of uploading my rejection notice and tax documents, I had a complete understanding of why my return was rejected and a step-by-step plan for resolving it. In my case, they discovered through analyzing the error codes that my ex-spouse had claimed me as a dependent (which was completely incorrect), and they provided me with the exact documentation needed to dispute this. They generated all the letters I needed, told me exactly where to mail them, and tracked the timeline for me. My case was resolved in 3 weeks instead of the 6+ months I was initially told to expect. Their identity protection guidance was especially valuable since I was worried about broader identity theft issues beyond just taxes.

When I had a similar issue with a rejected return and potential identity theft, I found that reaching the IRS was basically impossible. After days of busy signals and disconnections, I discovered Claimyr https://claimyr.com and their service literally changed everything. They have this system that navigates the IRS phone tree and waits on hold FOR YOU, then calls you when an actual human IRS agent is on the line ready to talk. I was beyond skeptical, but you can see how it works in their demo video: https://youtu.be/_kiP6q8DX5c. I went from spending hours getting nowhere to having a 20-minute conversation with an actual IRS identity theft specialist who confirmed someone had fraudulently filed using my information and started the resolution process immediately. The IRS agent was able to immediately flag my account, verify my identity, and set up special procedures for my legitimate return. They even provided a unique PIN for future filings to prevent this from happening again.

I have to admit I was completely wrong about Claimyr that someone mentioned above. After posting my skeptical comment, I was so desperate with my identity theft situation that I decided to try it anyway. I'm still shocked at how well it worked. I had spent nearly 3 weeks trying to reach the IRS myself with nothing but frustration and wasted time. The Claimyr service had me talking with an actual IRS identity theft specialist in less than 2 hours. They navigated all the phone menus and waited on hold while I continued working, then called me when the agent was on the line. The IRS agent confirmed my identity had been compromised, immediately flagged my account, and walked me through the exact steps to resolve it. They even expedited my case since they could verify my identity over the phone. I'm already seeing updates in my online account that would have taken months otherwise. For anyone dealing with tax identity theft, being able to speak directly with an agent makes all the difference in resolution time.

Aside from the identity theft possibility, I want to point out something important about S Corps that might be relevant here. There's a common misconception about how S Corp extensions interact with personal returns. When you file an extension for your S Corp (Form 7004), it ONLY extends the filing deadline for the business return (Form 1120-S), not your personal return. However, the S Corp income flows through to your personal return via Schedule K-1. If you haven't received your K-1 yet because the business return isn't done, you still need to file a separate extension for your personal return (Form 4868). Is it possible your accountant filed your personal extension but didn't clearly communicate this? That wouldn't explain the "already filed" error, but it's worth checking if there was miscommunication about what was actually filed.

Random question but did you have unemployment in 2024? There was a massive unemployment identity theft ring discovered recently. Criminals were filing fake unemployment claims using stolen identities, then filing tax returns to claim refunds on the taxes withheld from those benefits. If someone filed unemployment in your name, they might have also filed a tax return to collect tax withheld from those fake benefits. This happened to my brother and the first sign was exactly what you're experiencing - rejection with that same error code.