How Long Does an IRS Code 570 Hold Last?
Understand IRS Code 570: Learn what this tax account hold means, its typical duration, and steps to resolve it for your refund.
An IRS tax transcript offers a detailed look into your tax account, serving as an official record of your tax activity. These transcripts use various transaction codes to denote specific actions or statuses within the IRS system. Among these, Code 570 signals a hold on a taxpayer’s account, often impacting a pending refund while the IRS conducts a review. This code indicates processing delays.
Understanding IRS Code 570
IRS Code 570 indicates an “additional account action pending” or a “hold” on a tax account. This code appears on an IRS tax transcript and signifies that the processing of a tax return has been temporarily paused. Code 570 typically prevents the issuance of a refund or the adjustment of an account balance. This code does not automatically mean an audit or a problem with the taxpayer’s return. Instead, it serves as an internal flag for the IRS, indicating that further review or verification is necessary before processing.
Common Triggers for Code 570
Common situations can lead to an IRS Code 570. A frequent trigger involves discrepancies between income reported by the taxpayer and what the IRS has on file from third parties, such as W-2s or 1099s. The IRS may also place a hold if there are inconsistencies in claimed tax credits, particularly those requiring additional verification like the Earned Income Tax Credit (EITC) or the Additional Child Tax Credit (ACTC). These credits often undergo closer scrutiny due to their susceptibility to errors or fraud. Identity verification issues can also lead to a Code 570 if the IRS cannot confirm the taxpayer’s identity or suspects identity theft. Filing an amended return (Form 1040-X) typically results in a Code 570 as the IRS reviews the changes. Internal review flags, such as those from the IRS Automated Questionable Credit (AQC) program, can trigger this hold if a return is identified for further examination.
Typical Resolution Timeframes
The duration of an IRS Code 570 hold can vary significantly, depending on the complexity of the issue and the IRS’s current workload. While some cases may resolve in a few weeks, others might take several months. Generally, resolution for Code 570 often falls within a range of 45 to 120 days. Once the IRS completes its review and the hold is lifted, a subsequent transaction code will appear on the transcript. Code 571 indicates the hold has been resolved and the account condition is cleared. Code 846 signifies a refund has been issued, providing the date the refund was sent. A future date next to Code 570 on a transcript indicates when the IRS intends to revisit the account for further review, not a guaranteed completion time or refund date.
Steps for Taxpayers
Upon discovering an IRS Code 570 on a tax transcript, taxpayers can take proactive steps to help facilitate its resolution. The most important action is to carefully review and promptly respond to any correspondence received from the IRS. The IRS may send notices, such as Code 971, to request additional information or clarify details on the return. Ignoring these notices can lead to further delays and complications. Taxpayers should also regularly monitor their account status by checking the “Where’s My Refund?” tool on the IRS website, which provides general refund status updates. Ordering updated tax transcripts can help track changes in transaction codes. Having supporting documents readily available, such as income statements (W-2s, 1099s) and proofs of eligibility for claimed credits, can expedite the process if the IRS requests them. Being prepared to provide requested information can help move the review process forward.