I have been seeing a lot of worrying comments from readers around tax transaction and topic codes they are seeing on the IRS Where is My Refund (WMR) website, the IRS2Go mobile app or on their (free) IRS transcript.
Many filers get stressed, alarmed and worry about what these codes mean, what action do they have to take and if their IRS refund is going to be much lower than thought. The biggest fear is owing money or facing an IRS audit.
Based on what I have seen over the last few tax seasons and IRS guidelines, I will provide more insight in this article on what these tax topic and transaction codes mean.
I have also discussed specific codes, what they mean and provided links to articles with detailed examples in the sections below.
Fortunately most tax and transaction codes (TC) are just informational or updating status and the key is wait and follow the official instructions you get form the IRS. I will continue to update with new codes and you can stay connected via the following options.
What are these transcript codes and tax topics?
You can search the IRS website for each tax topic or transaction code but its not always clear what they mean and a lot of times they are pretty generic.
Many of these tax topics and transaction codes are based on the IRS’ tax system processing and reporting of individual and business tax returns.
They are supposed to provide insight into reasons why the tax return is still processing, why refunds are delayed beyond their normal schedule, which tax offsets have been applied that lowers your refund, why additional IRS verification or some other tax related issue
Transcript Code 150 vs Tax Topic 151 and 152
Transaction Code 150 – Return Filed & Tax Liability Assessed – is one you will prominently see on your transcript, likely the first line per the screenshot below, after your return is accepted by the IRS and added to their master file cycle for processing.
This line represents your liability to the IRS, based on your filing. It does not include your refundable credits, shown via the 766 the 768 – Earned Income Credit (EITC) codes.
If the number on your the 150 code line is positive, means you owe the IRS money. If negative, means you will get this added to your overall refund (or reduce tax owed).
However it is very common for this to also be $0 if you don’t owe the IRS any thing, based on the return you filed. If you have other refundable credits, it means your net refund will likely be made of these, less any IRS adjustments.
Remember you need to avoid looking at the 150 number by itself for your refund or tax owed. You need to add all your credits (766s, 768, 806) then subtract the amount by code 150, it will equal your net refund amount.
Tax Topic 151 and 152
While TC 150 is on your transcript after filing your return (and it is in the IRS master file for processing), you will often see corresponding Tax Topic 151 or 152 on the WMR website or IRS2Go mobile app.
This often happens early in the tax season before the PATH act lifts, where you will be presented with a message that refers to IRS Tax topic 151 or 152 in relation to your refund. But what does this mean?
Tax Code 151 means that you’re getting a tax adjustment or offset (e.g. due to a stimulus payment adjustment) which may result in your refund being less than you expected.
You will get an official IRS letter/report explaining the actual offset and adjustments to your tax return, and details on how to appeal this action – but likely it will delay you getting your refund.
While not great news, the silver lining here is that the IRS has processed your return (TC 150) and your adjusted refund (where applicable) should be on its way. You will have time to appeal any adjustments and if you win, you will get those paid back to you.
Tax Topic 152 on the other hand just means your return is under processing in line with IRS guidelines (generally within 21 days) and this notice confirm the methods for payment (direct deposit, check) and lists other items that could delay processing, per the screenshot below from the IRS website.
If your return takes longer than the standard timeframe, WMR and/or your transcript will update to show why (a new error code) and what actions are being taken.
Over the last few years this has been a concern and you can see this video for more on these tax codes specifically.
Tax Topic Codes 203 and 898 – Reduced Refund (Offset by BFS)
These tax topic references on WMR or your transcript may come up due to an injured spouse claim related to past-due child support, overpaid unemployment and other income tax (federal or state) tax obligations.
It is a bittersweet notice in that it means your return/refund has been processed but will be lower than expected or nothing at all. You will generally see tax topic 203 reflected as this tax code 898 on your transcript.
For non-IRS debts, this is initiated by the The Department of Treasury’s Bureau of the Fiscal Service (BFS) which can legally apply these refund offsets. The BFS will send you a notice, with details on adjustment, if an offset occurs. BFS will notify the IRS of the amount taken from your refund once your refund date has passed.
The IRS cannot help you with this claim and will only process it as directed (moving to code 151 above when done).
You should follow the BFS appeals process and only contact the IRS if your original refund amount shown on the BFS offset notice differs from the refund amount shown on your tax return.
However, if you are able to successfully appeal the offset you will get issued the additional refund and see this on your tax transcript as a credit (Tax code 766 – Tax Offset Reversal).
Code 570 (Return Reconciliation Errors)
Thanks to Domonique Jones for this update, who suffered from resolving this tax code last year. She had to eventually get a tax advocate for it to be fixed.
TC 570 is a general code and could be due to many factors causing the tax return to be off, that include mismatching wage reports from what you submitted vs. what your employer(s) did to the IRS. It could also be due to missing or incorrect information in your return or adjustments for past year IRS debts.
In many cases the IRS can and will automatically adjust this based on their internal review.
For more complex situations they will send you a notice for more details. So don’t immediately jump to a negative conclusion. But realize your refund could be delayed since this code will stop payment until the issue is resolved
This code impacted Dominique because her tax preparer used her pay stubs instead of the W2 end of year tax summary from her employer, which did not reconcile and which is why she got the code (in WMR and on tax transcript) after filing her tax return. Here is what happened next.
You will get a 45 day review letter, if something minor the IRS will fix on their own and then issue your return. If the IRS cannot resolve they will send you a follow-up and if they find more irregularities, they could end up doing an audit (low probability). But this will likely result in a significant delay to getting your refund.
After your issue is resolved you will get a 571 notice letter (resolved additional account action) before a refund is issued. You can see more around TC 570 in this article, including the resolution process.
Dominique did say that once you get an advocate the people at the IRS will no longer speak with you directly. They will only talk to advocate about your return. Essentially like a lawyer.
Codes 420, 421 & 424 (IRS further examination/audit)
A transaction/tax code 420 on your transcript means that your tax return was pulled for a potential audit or further examination by the IRS. It does not necessarily mean that it will assigned for a detailed audit, just that it is under examination because something got flagged during routine processing.
The return will be reviewed in due course by the IRS and may or may not necessarily be assigned for a full audit. You will receive and official IRS notice around this and a request for additional verification or documentation. Unfortunately this will likely delay your refund beyond standard processing times.
Code 421 would indicate that the audit was closed.
Code 424 means your return has been set aside for examination after initial examination (before you see TC 420). While this still does not mean a full audit is occurring (and there are different levels of audit) there is a manual review and this could delay getting your return processed and refund paid.
If your return was above board then then getting one of the above codes is not a reason to panic. The IRS will either resolve based on internal checks or with the additional clarification you provide in response to their correspondence. Just make sure you follow the instructions sent and call the IRS for further inquires.
Code 846 Refund of Overpayment – Refund Issued!
This is the code that most tax payers expecting a refund want to see. Basically TC 846 means the IRS is sending you the overpayment of your taxes – i.e. your refund!
Getting this code on your transcript is a good sign and confirmation that your refund was issued. See more on transcript transaction code 846 and direct deposit in this article.
If your banking information is incorrect and your IRS refund is rejected, you will still see code 846 followed by TC 841 and 971. A paper check will be mailed to your home address 4 to 6 weeks after the IRS gets notified of the bounced payment.
Tax Topic (and Publication) 971 vs. Code 971 on your Transcript
The 971 tax topic covers a broad range of spousal tax treatments and is based on IRS publication 971. It is focused on different tax treatments related to innocent (and not injured) spouse relief. This includes when a tax liability has has been reduced by the IRS through either relief from innocent spouse, separation of liability, or even bankruptcy discharge.
Seeing this code is actually a good thing as the spouse (or former spouse) will be relieved of the tax, interest, and penalties on a joint tax return, that would normally be obligated to share with their partner.
The IRS will only refund payments you made with your own money. However, you must provide proof that you
made the payments with your own money. See IRS publication 971 for more details.
Also note the 971 code on your tax transcript is different to the above 971 publication and is related to the issuance of a tax notice or letter by the IRS, after an adjustment or review has been completed.
Code 1121 – Return Under review
Code 1121, referenced in your account transcript or WMR/IRS2Go app, generally means that your tax return is under further review by the IRS.
This generally happens after initial system processing and an element gets flagged for review by an IRS agent. It may or may not result in a formal examination or audit by the IRS.
You may see the “Return Processing Has Been Delayed Beyond The Normal Timeframe” message on WMR or IRS2Go when this code shows on your transcript.
There is nothing you can do at this point and will just need to wait for the review to be done and respond to any formal notices from the IRS (e.g CP05). Calling the IRS may not be of much help as you will likely just be told to wait till the review is done.
Filers who received the 1121 reference number should continue checking WMR [or IRS2Go] for a refund date. [The actions related to this code are] part of the IRS effort to prevent improper payments some tax returns take longer to process. This reference code is not an audit code, it is simply a reference number while your account is being researched.Guidance around code 1121
Unfortunately this code will likely delay your refund payment and from recent reports it is taking the IRS at least 45 days to respond to tax filers seeing this code, with further instructions or actions.
Using Transcript codes and IRS cycle code to figure our what’s going on with your refund
While the above IRS codes can give you information on reasons your return is still processing or refund is lower than expected it does not give you much information around when this happened or when subsequent processing will occur. This is where your IRS master file cycle code can help.
Using your free IRS tax transcript, which shows various processing and error codes and a “cycle code,” you can get can get further insight into your tax refund status, processing stages and potential direct deposit date.
Essentially if you can see an 846 code on your transcript with a date and amount for the current tax season, it means your refund is on it’s way by the specified date.
If you see other codes like 570, 898, 420, 971 with future dates or $0 amounts, without a current year 846 code, it means your return is under processing refund may be adjusted or delayed. You will generally get updates in line with your daily or weekly cycle code.
WMR and IRS2GO refund status error codes
When you see an error on the WMR and IRS2Go tool you will get an error code and a short description. Sometimes these can tell you the cause (e.g 1161 – Refund delayed, bankruptcy on account ). But in many cases this provides no help and in that case you should reference the IRS Refund Error Code list to get more details.
I know it can be really frustrating to see ongoing delays in getting your tax refund. My answer is be patient, look into the above steps and contact a tax advocate or tax professional if you get nowhere with the IRS.
Note: Please consider this article as informational. You should consult a tax professional or call the IRS for your specific situation.