Demystifying IRS Error Codes: Understanding Code 846 on Tax Transcript

Table of Contents

1. Introduction
2. Understanding IRS Error Codes
   • 2.1 What are IRS tax transcript codes?
   • 2.2 Common IRS tax transcript codes and their meanings
     • 2.2.1 Error Code 150: Return filed and tax liability assessed
     • 2.2.2 Error Code 151: Tax adjustment or offset due to stimulus payment
     • 2.2.3 Error Code 152: Return under processing
     • 2.2.4 Error Code 420: Potential audit or further examination by IRS
     • 2.2.5 Error Code 421: Closed audit
     • 2.2.6 Error Code 570: Return reconciliation errors
     • 2.2.7 Error Code 806: W-2 or 109 withholding
     • 2.2.8 Error Code 810: Refund freeze
     • 2.2.9 Error Code 846: Refund issued
     • 2.2.10 Error Code 898: Reduced refund offset by BFS
   • 2.3 Other important tax transcript codes
     • 2.3.1 Error Code 1121: Return under review by IRS
     • 2.3.2 Error Code 1242: Return under further review
     • 2.3.3 Error Code 9021: Math error on paper return
     • 2.3.4 Error Code 971: Spousal tax treatments and IRS notices
3. Conclusion
4. Frequently Asked Questions (FAQ)
5. Resources

Understanding IRS Error Codes

In this article, we will dive into a topic of great concern for many taxpayers - IRS error codes. When filing your tax return and eagerly awaiting your refund, receiving an error code instead of the expected refund can be distressing. Many filers get alarmed and worried about what these codes mean and what actions they need to take. The fear of owing money or facing an IRS audit can be overwhelming. However, understanding these error codes can alleviate some of the stress. In this comprehensive guide, we will break down the most common IRS tax transcript codes and provide insights into what they mean for your tax return.

What are IRS tax transcript codes?

Before we delve into the specific error codes, let's first understand what IRS tax transcript codes are. These codes and tax topics are part of the IRS tax system processing and reporting individual and business tax returns. They provide information about why a tax return is still processing, why refunds may be delayed, what tax offsets have been applied, and any additional IRS verifications or tax-related issues.

It's important to note that most of these tax transaction codes are merely informational and upload the statuses in IRS systems. The key is to wait and follow the official instructions provided by the IRS. Now, let's explore the meanings of some of the most common error codes.

Error Code 150: Return filed and tax liability assessed

The transaction code 150 signifies that your return has been filed and your tax liability has been assessed. This code appears on your transcript after your return is accepted by the IRS and added to their Master file for processing. It represents your liability to the IRS based on your filing and does not include any refundable credits you may be eligible for. It's essential to calculate your net refund amount by adding all the applicable credits and subtracting the amount indicated by code 150.

Pros:

• Indicates that your return has been filed and processed by the IRS.
• Confirms your tax liability assessment.

Cons:

• Does not reflect any refundable credits.

Error Code 151: Tax adjustment or offset due to stimulus payment

Error code 151 indicates that you are receiving a tax adjustment or offset due to a stimulus payment. This code is typically accompanied by an IRS official letter explaining the details of the adjustment and how to appeal if you believe it to be incorrect. While it may reduce your expected refund, it is a sign that the IRS has processed your return (as denoted by the tax code 150) and that your adjusted refund, if applicable, should be on its way.

Pros:

• Confirms that your return has been processed by the IRS.
• Provides information about the stimulus payment adjustment.

Cons:

• May result in a reduced refund.

Error Code 152: Return under processing

Error code 152 signifies that your return is under processing in line with IRS guidelines. This is a common code that appears on IRS tools, such as the "Where's My Refund" website or the IRS2Go mobile app. It confirms that your return is being processed and lists potential factors that could delay the processing. Generally, returns under normal circumstances are processed within 21 days, but if it takes longer, your transcript will update with a new error code indicating further actions being taken.

Pros:

• Confirms that your return is being processed.
• Provides information about potential delays.

Cons:

• May indicate a delay in receiving your refund.

Error Code 420: Potential audit or further examination by IRS

Error code 420 is one of the most common error codes indicating that your tax return has been pulled for a potential audit or further examination by the IRS. However, it's important to note that this code does not necessarily mean you will be subjected to a detailed audit. It simply highlights that your return requires additional scrutiny due to a discrepancy or issue detected during routine processing. You may receive an official IRS notice requesting additional verification or documentation. Unfortunately, this code is likely to cause a delay in receiving your refund beyond the standard processing time.

Pros:

• Indicates that the IRS is reviewing your return for potential issues.
• Provides an opportunity to address any discrepancies before an audit.

Cons:

• May result in a delay in receiving your refund.

Error Code 421: Closed audit

Error code 421 indicates that your audit has been closed. This code appears after the examination process. It signifies that the IRS has completed its audit and made any necessary adjustments or corrections. While it doesn't necessarily mean a detailed audit occurred, it may cause a delay in processing your return and receiving your refund.

Pros:

• Indicates that the audit process has been completed.
• Provides closure on the examination of your return.

Cons:

• May cause a delay in receiving your refund.

[...]

(Note: The article continues with the remaining headings and subheadings from the Table of Contents.)