You may be reviewing your tax transcript and wondering why a Code 290 appears. Code 290 is for “Additional Tax Assessed.” But you don’t necessarily owe additional taxes – the code can appear even if there is a $0 assessed.
If the amount is greater than $0, you’ll need to call the IRS or wait for a letter in the mail explaining the change to your return. If you agree with the amount due, you should make a payment.
What is IRS Code 290?
IRS Code 290 indicates an additional tax has been assessed on your account. There are several reasons that you might have additional taxes due such as the results of an audit or incorrect calculations on your return.
If a hold has been lifted off of your account and no additional tax has been assessed, you will still see Code 290 on your transcript, but it will show a $0. A Code 290 with a $0 indicates that the IRS reviewed your return but did not charge you any additional tax. You may not even be aware that your return is under review unless you check the Where’s My Refund tool or your transcript and see the code.
Possible Reasons for IRS Code 290
There are several potential causes of Code 290 on your return. The important thing is to remain calm until you receive the full explanation of the charge on your account in the form of a letter from the IRS. Once you receive the letter with the explanation, you can choose how to respond.
IRS Audit
One of the most common causes of additional taxes being assessed is an audit. In an audit, the IRS looks at your income, deductions, and payments to ensure that the return has been calculated correctly. If they find an error, they will change the return and charge you the additional tax.
Other Adjustments to Your Return
Many returns are reviewed by automated processes. The computer compares the information provided on your return against information provided by your employer and other financial institutions. If you did not report all of your income, the IRS will adjust the return and send you a notice showing how the new return was calculated.
A Hold Has Been Lifted
If the amount shown next to Code 290 is $0 then the hold on your account has been lifted and no additional amount is due on the return. You may not even be aware that your return was under review until you see Code 290 on your transcript. The IRS does not send notifications of reviews where no changes are assessed.
Resolving IRS Code 290
Once the IRS has finished their audit and assessed additional taxes, they will send you a letter explaining the changes. You can put together a written explanation of why the change is wrong if you disagree with the assessment amount. Your written correspondence will need to be mailed or faxed to the IRS processing centers or you can deliver it in-person to a local IRS office.
What Does the Amount on Code 290 Line Mean?
The amount on the Code 290 line is the additional tax being charged to your account. The IRS will send a bill for the additional taxes due along with a due date. If you agree with the change, the taxes should be paid as soon as possible to avoid additional penalties and interest.
What Does the Date on Code 290 Line Mean?
The date next to Code 290 is the date that the IRS charged the additional tax due. The interest charged on the balance due will be calculated as of the original due date of the return, not the date that the IRS finishes its review.
How to Know When Code 290 is Resolved
Once the IRS Code 290 is on your account, the audit has been completed by the IRS. If you agree with the assessment, you don’t need to take any additional steps to resolve Code 290.
My IRS Assessment is Wrong
You may disagree with the additional tax assessed on your account as the result of an IRS review. If you disagree, you have several options for resolving the issue.
Call the IRS
You can call the IRS at 1-800-829-1040. Wait times can be hours long during certain parts of the year so be prepared to wait to speak with an agent. You should be ready to verify your identity and explain the issue. The IRS will often request a written explanation of the issue before they will make an adjustment to your account.
Contact Your Local IRS Office
You can speak directly with an IRS agent by making an appointment at your local IRS office. You need to schedule the appointment in advance and appointments are limited. You should bring a written explanation of why you disagree with the change and any backup documentation needed to support your claim.
Contact the Taxpayer Advocate Service
If you’ve been unable to successfully plead your case to the IRS, you can reach out to the Taxpayer Advocate Service. The Taxpayer Advocate Service is a department within the IRS tasked with assisting taxpayers with the resolution of their issues.
Contact a Tax Professional
If you’ve been unable to resolve your issue, you should reach out to a tax professional such as the experienced professionals at Tax Shark. They have worked with thousands of taxpayers and helped resolved issues such as incorrect tax assessments because of Code 290.
FAQs
Here are the answers to some common questions about the IRS Code 290.
An IRS audit is indicated by code 424 or 420, which will appear on your return if it has been selected for review.
Code 290 is an “Additional tax assessed.” The amount shown with the code may be $0 if no additional tax is assessed.
