Don’t Panic! Understand IRS Code 1242 and Get Your Refund on Track

After submitting your tax return you may see the following message with reference to code 1242 and Tax Topic 151 when you check your IRS refund status.

Naturally when seeing this many taxpayers may get stressed and worried about what’s going to happen next. Read on to see what this means, next steps and expected timeline.

Ref Number1242

What does Reference Number 1242 mean for My refund Payment?

Reference number codes are how the IRS systems classify informational or processing actions, much like tax transcript codes.

According to the IRS manual, Code 1242 essentially means, your return was received but is frozen (from any further actions) and under review. So while this does create a sense of panic, don’t get overly stressed as the IRS routinely reviews tax returns for errors and potential fraud.

Also as indicated, you can contact a IRS customer service representative to discuss this further, but you are unlikely to get much new information.

There is not much you can do at this stage as you will need for the IRS to get back to you via a formal notice. Which is normally a CP05 Letter to verify some of the information in your tax return filing.

But it does mean your tax filing is under review and in queue for further actions. The level of review, or audit, will determine next steps and the duration of your wait.

IRS Reference 1242 (Return under review)
IRS Reference 1242 (Return under review)

How can I get more information?

You can also review the link in the status message with a reference to Tax Topic 151. This will confirm the process the IRS uses to signify the next processing stage and what your options are to appeal the proposed adjustments or proposed/taken collection action.

There may be situations where you also need to visit a local taxpayer office to verify your identify or undertake a more detailed in-person audit.

You should also check your IRS tax transcript for more information and other codes. For example, transcript code 420 means you will be facing an actual audit.

How long will it take?

Once you see this message it could take several weeks (up to 120 days) for the IRS to get back to you and complete their review. If your issue is complex and you lodge an appeal, the whole process could take months.

During this process they may request additional information via formal notices, that you should promptly respond to.

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3 thoughts on “Don’t Panic! Understand IRS Code 1242 and Get Your Refund on Track”

  1. Its been 14 months and i haven’t received any notice from the irs requesting any additional information. If i didnt get any notices in the mail in 14 months is it safe too say that i should be receiving my return soon. Its been in review 14 months with no additional information requested. Whats going on? Why has it taken so long when i havent received any additional requests.

    • Don’t feel bad I’m still waiting on my 2019,2020,2021 and 2022 refunds for this very thing. I call about once a week to insure and I’m told the same thing give us another 180 days were backed up. 3 years without a refund and I’ve provided all documents that were ask for.

    • Going on 3 years still waiting, went down town all paper work they wanted. Call back if you don’t get letter .wait 9 weeks ,every 9 weeks called them same routine


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