IRS Transcript Codes 290 and 291 Explained: Additional Tax Assessed or Refund Adjustment

If you’ve been waiting on your tax return processing and refund status for a while, you may see transaction codes 290 and 291 appear on your free IRS tax transcript once the IRS moves your case forward.

Code 290 is generally accompanied by the line “Additional tax assessed,” along with a cycle code, date, and dollar amount. Seeing “additional tax assessed” can trigger a moment of panic, especially if you filed an amended return or have already experienced processing delays — but the code itself is system-generated and routine.

Do I Owe Taxes or Am I Getting a Refund If I See Code 290?

Code 290 is, in a sense, good news to see: it means your return has been processed and reviewed, and the IRS has reached a determination — it’s no longer sitting on hold.

TC 290 stands for “Additional Tax Assessed,” but it does not automatically mean you owe money. The code frequently appears with a $0 amount, which simply means any hold on your account has been lifted and no additional action is required from you.

If the amount is greater than $0, the IRS has determined you owe additional tax, and you’ll receive a notice or letter in the mail explaining the assessment and your payment or appeal options. This notice typically shows up as code 971 on your transcript alongside the 290.

If you agree with the IRS’s determination, pay by the due date on the notice to avoid additional penalties and interest piling up. If you disagree, the notice will explain your appeal rights and deadline.

What Does Code 291 Mean?

If you’re due a refund or an adjustment following the IRS’s review (code 290), you’ll typically see code 291 — Reduced or Removed Prior Tax Assessed — with the amount shown as a negative number. This is often followed by code 846 once the refund is actually issued.

If you had an existing balance due, code 291 can also partially or fully reduce that liability instead of triggering a refund.

In some cases, if your refund was delayed due to IRS processing backlogs, you may also receive an interest payment on the delayed amount — shown separately as code 776 on your transcript.

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Common Issues to Watch Out For

Panicking over “additional tax assessed” with no dollar amount. A $0 assessment is common and simply means a hold was lifted — check the actual dollar amount before assuming you owe anything.

Assuming code 290 means your case is fully closed. It means the IRS reached a determination, but if a 971 notice follows, you still need to read and respond to that notice.

Missing the connection between 291 and 846. If you see code 291 (a reduction) but no code 846 yet, your refund hasn’t been issued — check back for 846 to confirm the payment is actually on its way.

Confusing 290/291 with an audit notice. These codes reflect routine return processing and reconciliation, not necessarily an audit — most 290/291 activity is automated matching against W-2 and 1099 data, not a manual examination.

Not reading the accompanying notice. The transcript code alone doesn’t explain why the adjustment happened — the notice (code 971) or the specific dollar amount tied to the 290/291 entry has that detail.