If you spot an IRS Code RC 570 on your transcript, that means there is a delay in processing your return. If you have been waiting on a refund that is taking longer than usual, you may want to take a look at your tax transcript to see if the code appears (available at IRS.gov).
The code does not necessarily mean that there is a problem with your return, but it does mean that it will take longer than usual to finish processing.
What is IRS Code TC 570?
IRS Code TC 570 means that there is a hold on your account preventing the IRS from finalizing your return. You need to wait for the IRS to send you a request for additional information or release your refund. The IRS will not give you additional information about your return until they have finished processing the hold.
There are numerous possible reasons that your return may be flagged for additional review. You may want to ask a tax professional to review your return while you wait for the IRS to respond.
Possible Reasons for TC 570
There are several possible reasons that you might have an IRS Code TC 570 on your account. We’ve listed several of the most common reasons below.
Mismatch between reported wages and 3rd party income
The IRS receives tax information directly from your employer and compares it to the figures you include on your tax return. If your return does not match the information provided by your employer, the IRS will take additional time to process the return and send you a mismatch notice when they are done processing.
It is possible that your employer made a mistake on your W-2 in which case you should request that they issue a corrected W-2 (W-2c). If your employer refuses to issue a W-2c, you can all the IRS and have them issue a warning to your employer.
Identity verification
With the rise of fraud and identify theft, the IRS has become increasingly diligent with flagging returns for identity verification. If the IRS needs additional information to verify your identity, they will send you a letter and ask for copies of your IDs or other identifying information. The IRS has certain criteria that will trigger an identity verification request but also issues the requests randomly.
Tax credits
Certain tax credit require additional review by the IRS. These credits include the Earned Income Tax Credit (EITC) and the American Opportunity Tax Credit (AOTC). In past years, returns with EITC received their refunds in approximately three weeks.
With the change in rule for 2021 that allowed taxpayers to use the prior year’s income to claim the credit, the processing time for returns with EITC has increased significantly, and have sometimes taken months.
Rebate recovery credit (stimulus) and child tax credit
In 2020 and 2021, the IRS was responsible sending out the stimulus payments and advanced child tax credit payments. If were eligible for these payments but didn’t receive them, you could claim them on your tax return. However, because the payments were sent out early in the year, many people were unaware of how much they had received and made errors on their returns. These delays resulted in a significant numbers of IRS TC 570 and correction letters issued by the IRS.
If the IRS says that you received payments, but you did not actually receive the stimulus payments or advanced child tax credit payments, you need to call the IRS and ask them to put a trace on the payments. Payment traces can take several weeks. If the trace shows that the payments were never cashed, the IRS will allow you to claim the credit on your return.
Resolving TC 570
Unfortunately, taxpayers can’t proactively resolve TC 570 on their account. You have to wait for the IRS to finish processing your return. You’ll see a TC 571 when they resume processing your return. The IRS will send you a notice if they identify any necessary changes to your return.
Calling the IRS will not resolve the hold faster. The IRS call center cannot give you any additional information until the review of your return is complete.
If the IRS decides to send you a correction letter for your return, you will see a code 971 appear on your transcript.
The IRS Where’s My Refund website will say that that IRS is still processing your return while your account has 570 on it. Once the return is approved, you will be able to track your refund on the Where’s My Refund site.
What Does the Amount on Code 570 Line Mean?
IRS TC 570 will show up on your account with a $0.00 amount. This is because the Code 570 itself does not change your return. If the hold and subsequent review result in changes to your return, the difference will show up with the change codes.
How Do You Know When TC 570 Is Resolved?
Once the IRS removes the hold on your account, you will either receive a letter outlining changes to your return or you will receive your refund as expected. You can also monitor the status of the hold by monitoring your account on IRS.gov.
How Long Will This Delay My Refund?
The IRS resolves many of the TC 570 issues within a few weeks. Over the past few years, due to increased workloads and lack of funding, response times from the IRS have slowed significantly and may TC 570 resolutions are taking months to clear up. If a significant amount of time has passed without any updates on your account, you can contact the Taxpayer Advocate’s office to ask for assistance.
My IRS Assessment is Wrong
When the IRS finishes reviewing your return, you may receive a notice of assessment. You don’t have to accept the IRS adjustments. You are given the opportunity and time to respond (usually 30 days). You have several options for resolving an incorrect assessment.
Contact your local IRS office
You will need to write a letter explaining why the assessment is wrong. You will also need to provide back up documentation supporting your claim. Historically, the IRS has processed written responses in 30-60 days, but it can take up to a year for your correspondence to be reviewed. You can also visit the office in person to speak with an IRS representative.
Contact the Taxpayer Advocate Service
The Taxpayer Advocate Service was created to help taxpayers receive fair service from the IRS. They can help you contact the correct departments or check into any unreasonable delays. The Taxpayer Advocate Service does not have authority over the IRS but can facilitate faster response times.
Contact Tax Shark's friendly tax pros
Tax professionals can walk you through the notice resolution processes and help you draft correspondence with the IRS. Some firms offer specialized engagements specifically for IRS issues. Tax Shark has an IRS letter review services designed to help reviews and audits be painless as possible.
A tax professional will have you sign a Power of Attorney (POA) so that they can communicate with the IRS on your behalf to resolve the issue. The POA does not give the tax preparer any other authority over your account.
FAQs
Here are the answers to some common questions about IRS Code 570.
This phrase means that the IRS needs to review your return further before issuing your refund. If they determine additional information is needed, you will receive a letter.
Code 971 means that the IRS has sent you a letter that will contain additional information. You’ll have to wait to receive the letter in the mail to determine the content.
Yes. An amended return is treated like a submission for another return. An amended return can be subject to the same verification as an original return.
It can take a week or two to update after verification. If you don’t see the verification on your transcript, the processing of the verification may be delayed. If more than a couple of weeks have passed, you should call an agent to verify that they received your information.
