Understanding Income and Withholding Verification Reviews and What to Expect During the 60–120 Day Hold

Few things cause more stress during tax season than opening your mailbox and finding a CP05 or 4464C letter from the IRS. These letters are some of the most common notices taxpayers receive when their refund is selected for income verification or withholding review. While they do not necessarily mean you made a mistake, they do mean your refund will be delayed—often significantly.

The key to navigating these notices is understanding why you received one, what the IRS is checking, and how long you should expect to wait before your refund is released.

Here is everything you need to know.

What Is a CP05 Letter from the IRS?

The CP05 notice informs you that the IRS is holding your refund while they verify:

• Your income
• Your withholding amounts
• Tax credits you claimed
• Your filing status
• Dependents you listed
• Whether the return is legitimate

A CP05 letter usually states that no action is required from you, meaning the IRS is reviewing internal records rather than requesting documents.

Why You Receive a CP05 Letter

Most CP05 reviews are triggered by:

• Wage or withholding mismatches between your return and employer filings
• Early filing before IRS receives employer wage data
• Concerns about refundable credits (EITC, ACTC, CTC)
• IRS identity or fraud screening filters
• Large refund amounts

The CP05 notice is not an audit. It is an internal verification hold the IRS uses to cross-check your information.

What Is a 4464C Letter?

The 4464C Letter is issued by the IRS’s Integrity and Verification Operations (IVO) unit. It is used when the IRS needs additional time to verify:

• Your income
• Your withholding
• The legitimacy of the return
• W-2 and 1099 information
• Social Security Number matches
• Identity consistency

A 4464C letter typically appears after transcript code 570 posts (refund hold).

Why You Receive a 4464C Letter

A 4464C letter usually means the IRS flagged your return for one of the following reasons:

• W-2 or 1099 forms were submitted late by your employer
• Your income jumped significantly from prior years
• You changed jobs or had multiple employers
• Tax credits need verification
• The IRS detected potential identity fraud indicators
• A dependent was claimed on multiple returns
• Withholding amounts appear unusually high

A 4464C review is more involved than a CP05 review and typically takes longer.

What the IRS Is Checking During These Reviews

Both CP05 and 4464C letters involve income and withholding verification, which means the IRS is confirming:

Income

They compare:

• W-2s
• 1099s
• Employer wage reports
• IRS wage transcripts

Withholding

They verify that:

• Your employer actually submitted the withholding you claimed
• Your W-2 amounts match what the IRS has on file

Credits

They review:

• Child Tax Credit
• Additional Child Tax Credit
• Earned Income Tax Credit
• Education credits
• Recovery or refundable credits

Identity

If your return triggers suspicious patterns, additional identity checks occur before the refund is released.

How Long Will the Delay Be?

This is the most important question taxpayers have. The IRS outlines expected timelines in these letters, but actual delays often vary.

Typical CP05 Delay Timeline

The CP05 states the IRS will resolve the review within:

• 60 days

However, many taxpayers report:

• 60–90 days
• Longer delays if IRS needs employer wage information
• Extra time if transcripts show a TC 570 followed by no movement

Typical 4464C Delay Timeline

4464C reviews usually take:

• 60 to 120 days
• Sometimes longer if the IRS is waiting for wage information from employers

4464C delays commonly extend into April, May, or even the summer for early filers.

Why Delays Often Last Longer

IRS verification reviews take extra time when:

• Employers submit W-2s late
• Identity checks require more research
• IRS systems flag your return for multiple verification layers
• The IRS asks your employer for additional information
• Your return has complex income or multiple job changes

What You Should Do When You Get a CP05 or 4464C Letter

The most important part of these notices is this:

Do not send anything unless the IRS specifically requests documents.

Sending unsolicited paperwork can slow your case down.

Here’s what you should do instead:

1. Read the letter carefully

Confirm whether the letter asks you to take action.
Most CP05 and 4464C letters do not require a response.

2. Watch your IRS Account Transcript

Track your progress by looking for:

• TC 570 – Refund on hold
• TC 971 – Notice issued
• TC 571 or 572 – Hold lifted
• TC 846 – Refund approved and issued

If 60–120 days pass without movement, transcript monitoring becomes essential.

3. Wait for the IRS review window to close

You cannot speed up the process.
Calling early will not accelerate the review.

4. Respond immediately if the IRS eventually requests documents

If the IRS later sends a letter requesting information, respond quickly with:

• W-2s
• 1099 forms
• Proof of withholding
• Identity verification documents
• Proof of dependents or residency

5. Call the IRS only after the review period has passed

If the letter says 60 days, call on day 61 or later.
If it says 120 days, wait until that period ends.

How These Letters Affect Your Refund

A CP05 or 4464C letter automatically:

• Places a hold on your refund
• Triggers transcript code 570
• Suspends refund processing until verification is complete
• Stops all movement until an IRS agent clears the review

Your refund cannot be released until the hold is lifted and a new transcript code posts.

Once the IRS completes the review, your transcript will show:

• TC 571 or 572 – Hold resolved
• TC 846 – Refund issued

When Should You Worry?

Most CP05 and 4464C reviews end normally, but you should pay attention if:

• You receive a follow-up notice requesting documents
• You receive a Letter 5071C or 4883C for identity verification
• Your transcript shows a TC 810 refund freeze
• Your review extends past 120 days without updates

In those cases, additional verification or IRS contact may be necessary.

Receiving a CP05 or 4464C letter from the IRS can be stressful, but these notices are part of routine income and withholding checks that affect millions of returns each year. These letters mean the IRS is verifying information before releasing your refund—nothing more, nothing less.

Expect a delay of 60 to 120 days, depending on the type of letter, but remember:

• You usually do not need to take action
• Your IRS Account Transcript will tell the real story
• Your refund will not release until the hold is cleared
• Most reviews resolve without requiring additional documents

Patience is essential during these verification holds, but understanding the process can reduce stress and help you track your refund more accurately.