Seeing TC 420 (Examination/Audit Initiated) on your IRS transcript is one of the most stressful moments a taxpayer can experience. It means your return was pulled for an audit, your refund is frozen, and the IRS is reviewing income, credits, deductions, or withholding.

But there is a transcript code that signals the best possible outcome—a quiet, behind-the-scenes victory:

TC 421 — Examination Closed.

This code means the audit is finished, the IRS has accepted your return as filed, and your refund is officially being released. Even better, TC 421 is often followed by the code every taxpayer wants to see:

TC 846 — Refund Issued.

Below is a clear guide to understanding TC 421, what it means, and how soon your money will arrive.

What Is TC 421?

TC 421 is the IRS transaction code for:

Audit Closed / Examination Reversed

In simple terms, it means:

• The IRS has completed the audit
• Your return was accepted without changes
• No additional tax is owed
• Your refund freeze has been lifted
• The case is closed in your favor

If you were worried about penalties, additional tax, or long delays, this code tells you the audit ended with zero negative findings.

Why TC 421 Appears After TC 420

When your return is first flagged for an audit, the IRS posts:

• TC 420 — Examination Opening
  This freezes your refund and signals an internal review.

When the audit is resolved, you will see:

• TC 421 — Examination Closed

Once this code posts, the IRS automatically releases the freeze and resumes refund processing.

In most cases, the refund is approved immediately afterward.

The Best Sign: TC 421 Followed by TC 846

If the IRS audit closes without increasing your tax, the transcript will typically show:

• TC 421
• TC 846 (Refund Issued)

This pairing confirms:

• You passed the audit
• Your refund is approved
• Your money is on the way

TC 846 will include a posting date—the official release date for your funds.

How Soon After TC 421 Will You Get Your Refund?

Here is the typical timeline once TC 421 appears:

✔ Within 0–7 days

Your transcript updates with TC 846 (Refund Issued).

✔ After TC 846 posts

Bank deposit arrives 1–3 business days later.

✔ If receiving a paper check

It may take 1–2 weeks depending on mail volume.

If TC 421 posts but TC 846 has not yet appeared, check your transcript daily. The refund release is normally the next step.

Why Did Your Return Get Audited in the First Place?

TC 420 audits can be triggered by:

• Income mismatch (W-2/1099 data not matching return)
• Large refundable credits (EITC, ACTC, AOTC)
• High deductions compared to income
• Omission of a tax form
• Random computer score selection

But if TC 421 posts, the IRS found no errors that changed your tax.

What If Your Transcript Only Shows TC 421 but No Refund Yet?

This is normal for a short period. You may still be in line for processing.

Here’s what to check:

1. Look for a pending code

TC 971 with a notice may indicate follow-up, but usually after TC 421 it’s routine.

2. Confirm direct deposit info

Errors in bank routing or account numbers cause delays.

3. Watch for TC 846

This is the definitive refund release code.

If more than 2 weeks pass without TC 846, calling the IRS may be appropriate.

What TC 421 Does Not Mean

TC 421 does not necessarily mean:

• You will get the full refund originally filed
• You will receive the refund immediately
• You are protected from future audits

It simply means this audit is officially over and the freeze on your account has been lifted.

How to Be Certain the Audit Was Resolved in Your Favor

Look for these signs:

✔ No TC 290 adjustments

If the IRS assessed additional tax, you would see TC 290 or TC 300 entries.

✔ TC 421 appears with a “zero” amount

This indicates closure without changes.

✔ TC 846 posts soon after

This confirms your refund is on the way.

If all three are present, the audit ended perfectly for you.

TC 421 is one of the best codes you can see on your IRS transcript.
It means the audit is closed, your refund freeze has been lifted, and your refund is about to be issued.

Once TC 846 posts, your money will arrive shortly after—usually within a few business days.

Understanding TC 421 gives you peace of mind and lets you track the final steps of your refund timeline with confidence.