URGENT: IRS Identity Review (5071C) – Verify Return or Delay Refund

You filed your return in a timely manner and were waiting for your refund to be sent within the standard timeline that the IRS promises. But alas, it has been much longer than that and you are wondering, “Where is my DAMN refund!”

In several recent cases it appears that the IRS is delaying refund processing and payments by several weeks because they are spending a lot more time validating tax payer identities. This is mainly due to the rise in fraud and increased number of tax returns being processed.

This article will provide information on getting help and how tax payers know their return has been held up due to additional return verification; and how to quickly validate their identity with the IRS to get their refund as soon as possible. See the comments forum below for more taxpayer experiences and tips.

How you know your return has been held for IRS ID verification

In most cases if it has been more than 21 days after e-filing your return and you are seeing no progress on your tax return processing, despite WMR checking daily, there is a good chance your return has been held up for further review.

In particular, if you keep seeing a message like the one below after a month from your filing date it is highly likely that the delay is due to your return requiring further (identity) verification.

Generally speaking if you filed electronically via most leading tax software providers a lot of the basic information and math reconciliation checks have been done. So the most logical reason for the extended delays in processing is IRS systems have flagged your return for additional verification.

Flagging of returns is done programmatically in most cases by IRS tax systems, but could also be due to specific ID flags from past year returns, ex-spouse claims or if there are multiple returns with a similar SSN (a real case of identity fraud).

There are also cases where larger than normal refund payments (deposits) are also flagged for return verification – e.g. to validate bank account details. For example I experienced this when I had a $40,000 refund (because I paid too much in estimated taxes) delayed for several weeks, following a request for ID verification.

But its only when you get a formal notice or letter (see section below) from the IRS that you need to perform additional identity verification that you know that your return processing (and hence your refund) has been delayed.

Further, you likely won’t have a tax transcript and related processing codes available until you complete the ID verification process.

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IRS Identity Validation Process

The start of the identity validation process is getting an IRS letter. Until you get that, there is nothing much you can do and your refund processed status will show as “still being processed“.

It normally takes up to a month after filing to get the IRS return verification letter which will be mailed to the address listed on your latest filing.

The IRS notice will be of the series, 5071C, 5747C, 6331C or 5447. See the example below, which is a Letter “5017C – IRS Verify Your Identity” notice I received.

The letter will confirm the return was received but asks tax filers to verify their identity in order for the IRS to complete processing of the return and issue a refund.

The letter will provide options to complete this process including what to do if you didn’t file, which means you could be a victim of identity fraud.

It is critical you complete the ID verification process ASAP to move your return processing forward and get paid any refunds you are due.

How to verify your identity with the IRS

The fastest and recommended way to verify your identity is to go online and use the IRS‘ Identity Verification Service website. You can also call the IRS number (see section below for more) on your notice to complete your return verification.

You should only go to the IRS return verification website after being directed to do so after receiving the IRS verification letter which contains a unique 14-digit control number to start the online return verification process.

You will need one or more of the following to validate or confirm your identity. This must match what you provided on your most recent tax return:

• Name
• Social Security Number or Individual Tax ID Number (ITIN)
• Date of Birth
• Filing Status
• Mailing Address
• Third Party Verification Questions such as prior address, W2 information, mortgage information, etc., that only you should know.
• Estimated Refund Amount (if applicable, per your filing)

Once your return identity is verified you will see the message below. This will resume processing of the tax return and any applicable refunds.

You can also use your IRS account to start the verification process. You still need the verification letter from the IRS to get the 14-digit control number, but your IRS account dashboard will show a link to verify your tax return information per the screen shot below.

If the IRS is unable to verify your identity online or over the phone they will likely ask you to schedule an appointment at your local IRS office.

Also beware online scams – The IRS will never request identity verification information via email nor will they call a taxpayer directly prior to sending an official letter, with a 14 digit control number for validation (per screenshot above).

If you get a call from someone who says they are from the IRS, it is likely a scam unless they can provide you with a specific case number – which is found in the upper corner of the letter you would have received from the IRS.

You can only use the above method (online or via the phone) if you submitted a past tax return. If not, or this is your first time filing, you will need to call the IRS or visit a local office.

How Long Will Return Identity Verification Delay My Refund?

Once you successfully verify your return and identity, the IRS refund processing clock resets from the standard 21-day timeline. This will mean your refund payment will also be delayed.

It can take up to 9 weeks for the IRS to process your return and make a refund payment after successfully verifying your identity and tax return information. This assumes no other errors are found with return in subsequent processing.

However your return and refund status will update on WMR and the IRS2Go after 2 to 3 weeks. You will also see updates on your transcript once IRS processing is underway.

Other Options to Verify Your Return

It is highly recommended you verify your return online, but if you cannot you can also call the Taxpayer Protection Program Hotline on 1-800-830-5084 or number noted on your IRS verification notice.

You will need the same information as you would if verifying online, including current and prior year tax return information, to complete the verification process.

Identity Protection PIN (IP PIN)

The IRS has put in place and IP PIN for those who have experienced identity fraud or verification issues in the past.

It can also be used to protect dependents from fraud or others (e.g. ex-spouses) from incorrectly claiming them on their tax return for dependent credits like the CTC and EITC.

The Identity Protection PIN (IP PIN) is basically a unique six-digit number (not your SSN or TIN) you can use with the IRS to verify your identity when e-filing your return. It is only valid for a single calendar year and a new one is issued every year.

You can apply for an IP PIN on the IRS website or one is automatically issued to you (CP01A notice) if you have been a victim of tax-related identity in the past. Your actual pin will be sent in the mail.

If you don’t already have an IP PIN, you may get an IP PIN as a proactive step to protect yourself from tax-related identity theft.

If you want to get one for your spouses or other dependents, they will also need to complete the IRS’ identity verification process.

Feel free to leave a comment on your experience or if you have any further questions