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The 120-Day Review: Why Your Refund Is Stuck and What Codes to Watch For

Understanding the IRS’s Longest Processing Delay and How to Monitor It

If you’ve called the IRS about your refund and were told your return is in a “120-day review,” you’re not alone. This phrase is one of the most common and most frustrating responses taxpayers hear. But what does it actually mean? Why does it last around four months? And which IRS transcript codes confirm you’re in this extended review period?

This guide breaks down the real meaning behind the 120-day review, what triggers it, which codes to look for, and how to know whether your refund is truly just delayed—or stuck.

What Is the 120-Day Review?

The 120-day review is an extended IRS manual review period for returns that require deeper verification beyond automated processing. During this time, the IRS is examining items such as:

  • Reported wages
  • Withholding amounts
  • Refundable credits (CTC/EITC/AOTC/PTC)
  • Dependent eligibility
  • Identity confirmation
  • Prior-year filing history
  • Potential mismatches or red-flag patterns

This review is more serious than a normal delay.

It means:
Your return cannot move forward automatically and requires human review inside IRS processing operations.

The Most Important Codes Signaling a 120-Day Review

Here are the key transcript indicators to look for.

TC 570 — Refund Hold

This is the main indicator that your return is frozen.

Meaning: The IRS has paused your refund pending review.
No payment will be issued until the hold is resolved.

TC 971 — Notice Issued

This code often accompanies TC 570.

It may reference:

  • CP05 income verification
  • CP75 EITC review
  • 4464C audit review letter
  • 2645C extended correspondence letter
  • 5071C identity verification letter
  • 6331C ID/Self-ID notice

When paired with a hold, TC 971 confirms the IRS has formally initiated a deeper review, often referencing a notice that explains the reason.

TC 424 or TC 420 — Examination/Audit Indicators

If these appear, the review is more intense.

TC 424: Examination request
TC 420: Examination started

Not every 120-day review is an audit—but these codes indicate a higher-level examination.

TC 571 or TC 572 — Hold Released

These codes show forward motion.

If you see them, the review has concluded and processing is resuming.

TC 846 — Refund Issued

This is the finish line.

Once you see TC 846, the review is done and the refund is scheduled for release.

Why the IRS Uses a 120-Day Review Period

The IRS often defaults to a 120-day window when:

  • Employer W-2 data is delayed
  • Income documents do not match
  • Large withholding amounts trigger validation
  • Refundable credits raise eligibility flags
  • Dependent claims conflict with another return
  • Identity verification issues exist
  • Return was resequenced multiple times
  • AI-based anomaly detection flagged the return

The IRS gives itself four months because these cases often require:

  • back-and-forth document requests
  • cross-agency verification
  • employer data matching
  • potential fraud-review procedures

Does the IRS Always Take the Full 120 Days?

No.

About 40 percent of these reviews complete in:

  • 3–6 weeks, or
  • By the next transcript cycle update

However, if you were issued a document request or verification letter, the full 120-day clock often applies.

How the 120-Day Timeline Is Communicated

When you call the IRS, the agent may say:

  • “Your return is under review for up to 120 days.”
  • “Please allow up to four months for processing.”
  • “A notice was sent and your refund is on hold.”

This is not a vague estimate.
It means your return has been routed inside the IRS to a deeper examination path.

Should You Call the IRS During These 120 Days?

Call if:

  • You never received the notice referenced by TC 971
  • It has been more than 21 days since a verification was completed
  • Your transcript shows no movement for over 60 days
  • You have severe financial hardship (possible TAS referral)

Do not call if:

  • You’re still within the 120-day window
  • You already received instructions and are waiting for review
  • You are waiting for employer verification or dependent validation

What Happens When the Review Is Completed

One of two things will occur:

1. Refund Approved

You’ll see:

  • TC 571/572 (hold lifted)
    followed by
  • TC 846 (refund issued)

2. Refund Adjusted

You’ll see:

  • TC 290 (additional tax assessed)
    or
  • TC 766/767/768 adjustments

Sometimes the IRS identifies:

  • Unreported income
  • Incorrect dependent claims
  • Reduced credits
  • Incorrect withholding

Your refund may be lowered accordingly.

The IRS 120-day review is a real internal process—not a generic stall message. When your return is in this status, the IRS is performing deeper verification of your income, identity, or credits.

To monitor your return:

  • Watch for TC 570 (hold)
  • Watch for TC 971 (notice code)
  • Watch for TC 571/572 (hold released)
  • Watch for TC 846 (refund issued)

Understanding these codes provides clarity that WMR alone cannot.

You’re not being ignored—your return is being examined by human review.
And once the IRS finishes, you’ll see movement in your transcript before your bank account.

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