Generally, transaction codes and other tax issues are used on IRS refund requests; it is a way to provide information to business and individual taxpayers about what is happening with their tax returns.
The code 570 is common during tax filing season; it is normal to see it when your return goes through the initial processing of the system. Knowing what each code means makes the return process more efficient.
The meaning of code 570
According to IRS guidance, TC 570 indicates that your return is on hold for additional liability review. No further processing or payment is possible until you get a response from the study when the withholding is lifted.
This code can appear for various factors, whether a discrepancy with the employer’s stated wage income, identification verification, claims by the injured spouse, or reconciliation of tax credits claimed on the return against IRS records.
It is common knowledge that the IRS tax systems cannot automatically reconcile this problem. Therefore, they have specialized personnel to do the additional review and verification.
Attached to code 570, you will see code 971; this is the code that indicates a notice or letter from the IRS to give you more details of the problems or if there are any further delays by the IRS to review your situation.
Resolving the code 570 through TC 971
After some additional review, the IRS can resolve almost all TC 570 errors on its own and does not require you to take any special action to release your return for further processing.
To resolve the issue through the code 971, you only need to open the notice or letter sent. You will have all the details about the situation, the discrepancies, and the possible reduction of the refund.
It is the best solution to know what will be the next steps to follow to eliminate the withholding and to be able to complete the return to obtain the refund.
The meaning of the amounts on the line
You may see a $0 amount against the line where the code 570 is when the IRS has not processed/reviewed your return and the problem presented has nothing to do with money.
When the offices adjust your return, the amount may change to a positive number. Either way, it delays your refund payment. These delays have been many problems in the last few months because they extend well beyond the days and weeks of the standard deadlines.
What are the dates next to the 570 transcript lines?
Just as you will find the amount next to the code, you can also see some dates; it is important to note that it is the current year line. When you see the codes 570 and 971 on the same line with the same date, the IRS automatically adjusts your refund amount and sends you the resolution notice.
How do I know when the 570 was resolved?
You will know that the code 570 is in the past because you will advance to code 571, which indicates the freeze results, or 572, which means additional account action is resolved. It is also common that you will receive a notification that the issue is over.
As mentioned before, this situation will always delay your refund payment; the IRS almost always indicates that it can take between 45 and 60 days to receive the refund; however, in the last season, the delay has been between 90 and 120 days.
Therefore, when you see this code on your return, you should be prepared to get your refund later than expected.
For years I have studied American finance regulations. All the information in this blog is sourced from official or contrasted sources from reliable sites.
Salesforce Certified SALES & SERVICE Cloud Consultant in February 2020, Salesforce Certified Administrator (ADM-201), and Master degree in “Business Analytics & Big Data Strategy” with more than 13 years of experience in IT consulting.