Yes, indeed, they really do that. The person who has had their e-file reject must submit a paper return and call a special 800 number dedicated to this issue. It's a total double-whammy for the user. IRS tries to resolve these issues within 180 days... and if that delay of their return causes a financial burden they can file a petition. The wheels of progress turn slowly.
This is how a colleague of mine caught identity fraud. Someone had filed several fake tax returns with his information, called to have all of them invalidated as fake before submitting the "real" fake return, collecting the payment, and thus making it yet-harder for the real guy to claim the fake-but-not-fake was a false return.
Hmm. Canadian here, our SSN is called an SIN. NETFILE, which I didn't think was that innovative, matches SIN number to date of birth on file (which can be changed by phone call) and regardless, sends a refund to the address on file (which, like Direct Deposit settings, can be changed through a web interface). That said, I've never heard of someone committing tax fraud electronically, given the barrier to change an address. Google revealed no reported incidents, not even on forums. And if I had to submit on paper, as only 25% or so of Canadians do now, the software will let me print out all the forms I need, and if necessary, the PDFs from the CRA have fillable fields, IIRC. That said, there are still too many form types, even though most don't apply to me.
