Transaction Code 570 and Delayed Tax Refunds

Estimated reading time: 6 minutes

Transaction Code 570

Usually, around two weeks into tax season, we notice a surge of questions about the timing of refunds and IRS Transaction Code 570 that shows up on an IRS account transcript. Sometimes it feels like the tax season is progressing more slowly than previous years. Taxpayers see others getting updates through the IRS’s Where’s My Refund tool and receiving their tax refunds quickly. But many wonder why they haven’t received their tax refund yet and aren’t receiving updates. They look to transcripts for clues because they show what transactions posted to their IRS account.

Let us be frank. Transaction Code 570 on an IRS account transcript is a freeze code. But we are here to tell you that in many cases, this is no cause for alarm. It’s not an examination, which is sometimes referred to as an audit. What happens next could be a mystery and it resolves itself behind the scenes. Sometimes though, this is followed by the Transaction Code 971 which indicates a notice has been sent to the taxpayer. The notice is different for for each taxpayer and depends on the matter at hand. However, the good news is that sometimes the issue resolves itself without the taxpayer being sent a notice.

According to the IRS Internal Revenue Manual Transaction Code 570 is generated by automated Return Integrity Verification Operations (RIVO) processes at the IRS. They sound like the big bad guys. But they aren’t necessarily. Most of the processes from this area seem to be automated and easily resolved, unlike circumstances that may occur under examination. But again, chill. Sometimes 570 resolves itself with only the corresponding 571 transaction code to reverse it and remains a mystery.

Excerpt from IRS Internal Revenue Manual (IRM)

Transaction Code 570 is a freeze code.

Additional Liability Pending/or Credit Hold

Once the tax return seems to have met a road bump, taxpayers repeatedly return to the transcript looking for any new related codes. They continue to check Where’s My Refund repeatedly. They are left staring at at generic message “….your tax return is still being processed…” or in some cases, “…there is a delay in processing your tax return…”  It leaves people with more questions.

Phone calls to the IRS don’t yield more than a scripted response that they are under review and to wait another 45-60 days. The word “review” incites fear. It has been reported they have been hung up on by representatives answering the phones. This leaves people frustrated.

Despite being told that the Where’s My Refund tool by the IRS is the best way to check the status of your refund, taxpayers check elsewhere for clues about why they haven’t received their refund. Are there delays? What is the delay? Why? Is there a systemic problem with the IRS this year?

In the past, the IRS Where’s My Refund tool didn’t give you finer details as to why your tax refund might be delayed. There were very generic messages. The IRS has recently updated the system and are now providing additional details about the status of a tax refund. But these seem to be just as confusing. And sometimes, Where’s My Refund just doesn’t update with current information at all. The IRS doesn’t share and even denies the other way to get more info. That’s one reason people turn to transcripts.

What happens next?

Bring in the IRS account transcript. In our transcript article we provide full details about how these help you learn more about your tax refund. But if you already have your account transcript and you see Transaction Code 570, don’t panic.

Each year, there are a group of people who report that holds on their refunds because of TC570 and TC971 shown on their Account Transcripts. These transaction codes can mean different things for individual taxpayers. But taxpayers are still trying to draw conclusions based on these transaction codes since they are very vague and not more descriptive.

For instance, TC971 says a notice has been sent but not which notice. People are reporting they haven’t received anything in the mail and can’t seem to get an answer about what has been mailed when they call.

Transaction Code 971 – Notice Sent

We have reached out to the IRS to find out if there is some sort of systemic issue concerning people seeing the TC570 on their Account Transcripts and we get the same response: “the best way to check the status is with the WMR.” So for now, this is what we know about TC 570, TC971 on account transcripts.

Transaction Code 570 and and Transaction Code 971 The Transaction Code 570 description says “Additional account action pending.” Our research shows that the 570 transaction code and others shown on account transcripts are internal and can mean different things for individual taxpayers. 

Nonetheless, taxpayers are still trying to find a reason for tax refund delays based on these transaction codes since they are very vague and nondescript. For instance, TC971 says a notice has been sent, but our users are reporting they haven’t received anything in the mail; and that they can’t seem to get an answer about what has been mailed when they call. Again, oftentimes being hung up on my IRS representatives. See what others have reported about their TC 570 in our tax refund live discussion.

If you do get a notice it could be a simple request for documents. These are some of the documents that you should have available.

  • Copies of periodic pay statements or check stubs clearly identifying dates of your employment and the gross income received and withholding deducted.
  • W2 and/or 1099
  • If applicable, a copy of your Form 1095-A, Affordable Insurance Marketplace Statement, or documents showing proof that you or your family enrolled in health coverage through the Health Insurance Marketplace.
  • For tuition paid during the taxable year, receipts for tuition, fees and books, or transcripts from the educational institution. You can also submit a list of the classes you took showing the payments you made or documents showing that you were enrolled in a postsecondary school program.

Notices from the IRS

The IRS will send a notice or a letter for any number of reasons. It may be about a specific issue on your tax return or account, or may tell you about changes to your account, ask you for more information, or request a payment. Many times you can handle most of this correspondence without calling or visiting an IRS office if you follow the instructions in the document.

Some of the notices you may receive are below. This list is not all inclusive and are just examples.

CP05 /CP05-A: This notice is mailed to taxpayers to notify them that the IRS is holding their refund until the accuracy of the tax credits, income tax withholding or business expenses has been verified. The IRS is holding your refund while it is verifying the accuracy of your return, including one or more of the following you may have reported: credits, income and withholdings that were reported on your return. 

CP12: Math error. The refund amount is different than what you are expecting. This notice is sent when the IRS corrects one or more mistakes on your tax return which either result in a different refund amount, or in an overpayment when you thought you owed.

Letter 12C: The IRS needs more information before it can process your return.

Letter 4800C: This is a 30 day notice for a questionable credit. This letter is sent to taxpayers informing them that the IRS is proposing a deficiency or disallowing a claim for refund or a credit for a subsequent period’s estimated tax.

Comments are closed.