Key Takeaways
- Code 826 means the IRS applied part of your refund to your own existing IRS tax debt - different from Code 898, which covers non-IRS debts like child support.
- The memo line next to 826 tells you the form and tax year the debt is tied to.
- Your tax software's estimated refund won't reflect this offset unless you already knew about the debt when filing.
- If your refund isn't enough to cover the debt, the IRS applies what it can and may repeat the offset in future years until it's paid off.
- You can call the IRS to appeal the adjustment if you believe the underlying debt amount is wrong.
Transaction codes are used on IRS tax transcripts to show filers what has happened with their return processing, reasons for potential delays, when a refund will be paid, or why it’s delayed.
Given ongoing challenges getting through to a live IRS agent, many taxpayers turn to their free IRS transcript to see exactly what’s happening with their return and refund.
Tax Transcript Code 826
Code 826 reflects that part of your refund was taken by the IRS to pay off an existing or old IRS tax debt.
The memo line next to 826 (something like “1040 201812”) reflects that it was a tax debt tied to Form 1040 and the tax year (in that example, 2018) it applies toward.
You’ll also receive an IRS notice detailing the debt your refund was applied to and your appeal options. Confirmation of this notice shows up as code 971 on your transcript.
Note: you won’t see code 826 if your refund was adjusted under the Treasury Offset Program, which is specifically for non-IRS debt (that’s code 898 instead, and WMR shows a specific message for that scenario). Code 826 is only for debt owed directly to the IRS itself.
You can see a full listing of IRS transcript codes in this article, but this article focuses specifically on code 826 (TC 826), which many filers see after the IRS completes processing on a regular or amended return.
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Why Was My Refund Lower Than Expected?
The IRS generally adjusts your refund automatically for the overdue debt, and you’ll see this reflected on your transcript and in your payment. You can call the IRS for more detail and appeal the adjustment if you believe it’s incorrect.
Also note that your tax filing software won’t know about this debt unless you tell it beforehand, so your estimated refund from your software will differ from your actual refund once the offset applies.
This can also mean you lose your entire refund and remain on the hook for any advance refund loan you took out based on your estimated refund.
The IRS applies refund offsets to your oldest debt first. If your refund isn’t enough to cover it, you may see the same code again in subsequent years until the debt is paid off.
