What Does Notice Issued Mean on a Tax Transcript?

An IRS tax transcript provides a summarized record of your tax return information or account activity. It serves various purposes, such as verifying income for loan applications, including mortgages or student aid, or for personal record-keeping. These transcripts offer a convenient way to access essential tax details without needing a full copy of your original tax return. They can help you understand your standing with the IRS or confirm that estimated tax payments were properly applied.

What a Tax Transcript Shows

An IRS tax transcript condenses information from your tax filings. It is a summary, not an exact replica of your tax return, and may omit some personal details for privacy. There are several types of transcripts, each providing specific data, such as your adjusted gross income (AGI), filing status, taxable income, and payments made. For instance, a tax return transcript shows most line items from your filed return, while a tax account transcript details basic data and any adjustments made by the IRS.

Transcripts are valuable for financial purposes, like proving income to lenders for mortgages or auto loans. They can also be used to verify income when applying for government programs or financial aid. Reviewing past transcripts helps in estimating future tax liabilities or simply maintaining accurate financial records.

Understanding “Notice Issued” on Your Transcript

When “Notice Issued” appears on your tax transcript, often with transaction code 971, it indicates the IRS has generated and mailed a physical notice to you. This entry is an internal IRS indicator, signaling a communication regarding your tax account for a specific tax year is on its way. It does not mean the notice is available on your online transcript, but that a letter has been dispatched. This indicator signifies an IRS communication, which could be for various reasons, such as an adjustment to your return, a request for more information, or a notification of a balance due.

This code often appears when the IRS requires more time or information to resolve an issue, or for an update on return processing or a math error correction. While the indicator is on your transcript, the physical notice typically arrives by mail within a few weeks.

Common Notices Indicated

The “Notice Issued” indicator can correspond to various types of IRS notices, each addressing a specific tax situation. For example, a common balance due notice is CP14, which informs taxpayers of an unpaid tax amount. If the IRS finds a discrepancy between your reported income and third-party reports, you might receive a CP2000 notice proposing changes to your tax return. These discrepancies often involve income from employers or financial institutions.

Notices like CP12 are issued when the IRS corrects your tax return, potentially affecting your refund. If the IRS needs to verify your identity, especially due to suspected identity theft, a Letter 5071C might be sent. For collection issues, a CP504 notice can be a final warning before the IRS levies assets due to unpaid taxes. Other notices, such as CP2501, may simply request clarification regarding information on your tax return that does not match IRS records.

How to Respond to an IRS Notice

Upon receiving a physical IRS notice, read it thoroughly and carefully. Understand the reason for the notice, the tax year it pertains to, and any specific actions or information the IRS requests. The notice will typically include a reference number and contact information.

Note any deadlines for response, as failing to act promptly can lead to additional penalties or interest. If the notice requires a response or supporting documentation, gather all necessary records, such as W-2s, 1099s, or other financial statements. If you agree, follow the instructions for payment or correction; if you disagree, the notice will outline the dispute process. For clarification, contact the IRS using the phone number on the notice or visit the official IRS website.