Checking your tax account transcript is one of the first things you’ll have to do if your tax refund is late. You may see Code 570 listed on the transcript, indicating that the IRS needs additional time to process your tax return.
The code won’t reveal the reason why your tax refund was delayed. Sometimes the IRS lifts the code without requesting any action from the taxpayer.
However, in some cases, taxpayers receive a notice that lists the actions a taxpayer must take before tax return processing can continue.
This article will help you understand what IRS Code 570 is and what it might mean on an IRS transcript.
Table of Contents
How to Find Code 570?
The IRS will add Code 570 to a tax account transcript shortly after it detects a problem with a tax return.
So, you must look for this code on your account transcript if your tax refund doesn’t reach your bank account three to four weeks after you e-file taxes. You can request your tax account transcript from the IRS website or the IRS2Go app.
The code’s location in a transcript isn’t fixed. Still, Code 570 is usually in the middle or at the bottom of the list.
It’s also worth adding that it’s difficult to predict when this code might appear in an account transcript. Hence, it’s advisable to keep monitoring your tax refund’s status from the moment it enters the Individual Master File System.
Code 570 Components
Like all IRS transaction codes, Code 570 has four segments. Its description reads Additional account action pending, and it’s located in the Explanation of Transaction section.
The Date section shows when your tax refund was put on hold, and it usually does not correspond with dates next to Code 571 and Code 971.
The Amount segment shows $0.00 if the reason this freeze code was added to your account doesn’t affect the refund sum or the sum you reported. In case, Code 570 influences the refund sum; this segment will contain either a positive or a negative number.
In addition, the IRS might assign a new cycle code to your account if resolving the issue behind Code 570 requires a change of the account’s processing cycle.
The Meaning of Code 570
Code 570 suggests that an account was frozen due to an issue that prevents the IRS from processing a tax return and issuing a refund. In other words, this code may indicate you’re facing an audit.
In most cases, the IRS won’t disclose the reason why Code 570 was added to an account until the issue is resolved. The code is often lifted without prior notice, provided no action is required from a taxpayer.
However, the presence of the freeze code in a tax account transcript can indicate a more complex issue that requires the taxpayer’s attention. In this case, the IRS will send a notice to the taxpayer that explains the reason why the tax refund was delayed.
This will be documented in the account transcript by the addition of Code 971.
Associated Transaction Codes
This code often appears in combination with Code 571 and Code 971.
If your account transcript features Code 570 and Code 971, one above the other, the IRS has sent you a notice with details about why your tax refund was put on hold.
Hence, you’ll have to supply additional documents or correct the total income amount to resolve the matter. Code 571 or Code 572 will appear in the account transcript after the problem is fixed and the processing of a tax return continues.
You’ll probably receive the refund within six weeks if the dates next to Code 571 and Code 971 are identical, while discrepancies between these dates indicate that issuing the refund might take longer.
Reasons Behind Code 570
Freeze codes appear in tax transcripts for various reasons. It is, therefore, impossible to determine why your refund was put on hold unless the IRS sends you a notice explaining the cause.
Still, tax return processing is usually delayed for the following reasons:
EITC and AOTC Claims
Tax returns with claims for tax credits like Earned Income Tax Credit and American Opportunity Tax Credit need further assessment by the IRS, which is why they’re often put on hold. The eligibility requirements were changed in 2021, which resulted in longer processing times.
Recovery Rebate and Child Tax Credits
Taxpayers eligible for Child Tax and Recovery Rebate credits who didn’t receive their payment can claim these credits on their tax returns. Doing so carries the risk of having a tax refund delayed if the IRS claims a taxpayer received these payments.
Also, including the wrong child tax or recovery rebate amount on a tax return can be the reason why the IRS puts processing on hold. The quickest way to fix issues related to these credits is to contact the IRS after receiving a notice and providing the necessary documentation.
Incorrectly Reported Wages
The wage an employer reports to the IRS on the W2 form and the compensation you report on Form 1040 must be the same. Any discrepancies will cause suspicion and prompt the IRS to temporarily freeze your account.
In case your employer listed the wrong amount on the W2 form, you must ask them to resolve the matter with the IRS.
Identity Check
The IRS has clearly defined identity verification requirements. Consequently, tax returns that fail to meet these criteria are flagged for an additional check. Moreover, the agency sometimes randomly flags accounts for identity verification.
Identity-related issues don’t normally cause significant tax refund delays because they’re easily solved.
How Long Does it Take to Lift Code 570?
Don’t expect to resolve quickly, any issues that cause Code 570. Unfreezing your account can take weeks or months, depending on the severity of the issue.
Also, being proactive and trying to reach out to the IRS won’t help you fix the problem faster. Hence, you must wait to see if the IRS needs your assistance to lift Code 570 from your account.
Code 571 will appear in your tax account transcript once the issue is settled. However, seeing Code 971 next to Code 570 indicates that dealing with the problem might take some time.
During this time, your tax return’s status will be listed as ‘still being processed,’ and you’re unlikely to see any major updates.
Frequently Asked Questions
The IRS will send you a notice of assessment after Code 570 review is completed. The notice will include credit and offset adjustments. You’ll have thirty days to accept or decline the new assessment.
In case you choose to decline, you can either contact the IRS directly or hire professional help.
This code can indicate the IRS intends to audit your account, which in turn will delay your refund until the issue is cleared up.
However, the addition of Code 570 to a tax account transcript doesn’t always mean the IRS is initiating an audit because the agency can choose to pause processing a tax return for other reasons.
You’ll have to wait three to four weeks for the refund to reach your account after Code 571 is added to your tax account transcript.
Ensuring all information in your tax return is accurate is the best way to avoid Code 570. However, you should keep in mind that the IRS usually needs more time to process tax returns with credit claims, so you’ll need to be patient.
Final Words
Most tax refunds are delayed due to incorrect information. So, the easiest way to ensure you receive your refund on time is to double-check each piece of information you include in a tax return.
Despite this, the IRS might put your account on hold to perform an additional identity check or make sure you’re eligible for the EITC claim. Code 570 will pop up in your tax account transcript when this happens.
With a bit of luck, your account won’t be audited, and the IRS will resolve the issue without your assistance. However, this code can mean you may have to wait for your refund for several months if you’re asked to take additional steps.
Author:
Logan is a practicing CPA and founder of Choice Tax Relief and Money Done Right. After spending nearly a decade in the corporate world helping big businesses save money, he launched his blog with the goal of helping everyday Americans earn, save, and invest more money. Learn more about Logan.
