What is Code 570 on Tax Transcript?
Code 570 on a tax transcript signifies a delay in processing your tax return by the Internal Revenue Service (IRS).
When you see transaction Code 570 on your IRS tax transcript, it directly indicates that there is a hold or a delay in processing your return. As per the reference, this delay doesn't automatically mean that there's an error with your tax filing. However, it's a marker that the IRS requires additional time to review your submission.
A key implication of Code 570 is the potential need for further action on your part. The reference states that "you may receive a request for additional information – including a request to verify your identity." This means the IRS might send you a letter seeking clarification on certain items, or asking you to confirm your identity to prevent fraud.
Why You Might See Code 570
Various reasons can lead to a Code 570 being placed on your tax transcript, causing a processing delay:
- Routine Review: The IRS may be conducting a standard, albeit slightly extended, review of your tax return before finalizing it.
- Identity Verification: This is a common reason for Code 570. The IRS might need to confirm that you are indeed the taxpayer who filed the return to prevent identity theft.
- Information Discrepancies: There might be a mismatch between the information on your return and data the IRS already has (e.g., W-2s, 1099s).
- Unusual Activity: Certain deductions, credits, or income amounts that seem out of the ordinary compared to previous filings or average taxpayer behavior could trigger a closer look.
- High Volume Periods: During peak filing seasons, general processing delays can occur due to the sheer volume of returns, though a specific Code 570 often points to a particular hold on your account.
What to Do When You See Code 570
Encountering Code 570 can be concerning, but there are specific steps you should take:
- Monitor Your Mail: The most crucial step is to watch your mail for any official correspondence from the IRS. They will typically send a letter if they require more information or need you to verify your identity. These letters are often time-sensitive.
- Check "Where's My Refund?": While your transcript shows Code 570, the IRS "Where's My Refund?" tool on their website can sometimes provide a more user-friendly status update, though it might not always explain the specific reason for the hold.
- Do Not Refile: Do not attempt to refile your tax return. This will only complicate the processing and could lead to further delays or issues.
- Avoid Impulsive Contact: Unless a significant amount of time has passed (e.g., several weeks to months beyond the typical refund timeframe) without any communication from the IRS, it's generally best to wait. IRS phone lines are often busy, and without a specific request from them, you may not get much actionable information.
- Gather Documents: If you anticipate an information request (e.g., if you claimed new credits or had unusual income), begin gathering relevant documents to be prepared to respond promptly.
Implications of Code 570
While Code 570 indicates a delay, it is not necessarily an indication of an audit or that your refund will be denied. It simply means the processing is on hold until the IRS can complete their review or receive requested information. The duration of the delay can vary widely, from a few extra weeks to several months, depending on the reason for the hold and how quickly any requested information is provided. Patience is key when dealing with a Code 570.
