Tax Transcript Code 971: Your Ultimate Guide to the IRS Notice Issued Transaction

Transcript Code 971: What Does the IRS Want?

Seeing a specific code on your IRS Tax Transcript can be confusing—and worrying. Among the most common and often misunderstood is Transaction Code 971. This code, officially labeled “Miscellaneous Transaction” or, more simply, “Notice Issued,” is the IRS’s way of telling you: “A letter is on its way to you.”

While the code itself doesn’t mean something is inherently wrong, the underlying notice it represents requires your attention. Understanding this code is the first step toward a quick resolution and getting your tax process back on track.

What Is Tax Transcript Code 971?

IRS Tax Transcript Code 971 is an internal signal that the IRS has generated and issued an official notice or letter related to your tax account.

This notice is crucial because it contains the context, whether it’s an adjustment, a request for information, or an update on a manual review. When you see TC 971, you must immediately check your postal mail and your IRS online account for this official correspondence.

Why Does Code 971 Appear on Your Transcript?

Code 971 is a general notice indicator, and it can be triggered by many different IRS actions.

Common reasons you might see TC 971 include:

Tax Return Corrections: The IRS found minor computational errors or mismatches (e.g., misreported income or missing documentation).
Information Request: The IRS requires documentation, such as missing W-2s, 1099s, or proof to support certain credits or deductions.
Refund or Balance Adjustments: Notification of a change to your refund amount or the assessment of additional tax, penalties, or interest.
Manual Review Update: Your return was flagged for an internal or extended review (e.g., identity verification or an audit referral).
Collection Action: In more serious cases, it can accompany a notice of intent to levy or lien for unpaid taxes.

Important Pairing: TC 971 frequently appears alongside Code 570 (Additional Account Action Pending). If you see both, it confirms that a refund hold is in place, and the accompanying 971 notice explains why the hold was applied.

How Code 971 Impacts Your Refund and Account

The presence of TC 971 directly affects your peace of mind and, depending on the context, your refund timeline.

Scenario	Impact on Refund/Account	Action Required
TC 971 Appears Alone	Minor adjustment or informational notice. Refund usually processes shortly after.	Wait for the letter, read it, and file it for your records.
TC 971 → TC 570	Refund Hold. The notice (971) explains the reason for the hold (570).	Must respond to the notice and resolve the underlying issue.
TC 971 → TC 290	Additional Tax Assessed. The notice (971) explains the reason for the tax increase (290).	Pay the balance due or formally dispute the assessment.

Frequently Asked Questions About Code 971

Q: Does code 971 mean my refund is delayed?
A: Not always. If it appears alongside a hold code (570), your refund is likely on hold pending review or corrections. If not, it usually means you should check for clarification/adjustment notice.

Q: What if I never receive the notice?
A: Set up an IRS online account and check digital notices. If nothing appears in 21 days, call the IRS for confirmation.

Q: Can code 971 lead to penalties or audit?
A: If ignored or not resolved, yes. Prompt response is crucial to avoid penalties, additional interest, or audit triggers.

Q: How can I resolve a code 971 quickly?
A: Review the notice immediately, submit all requested information, and respond within the given timeline using certified mail or secure online upload.

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