What do codes mean on an IRS transcript? The list with the most important codes in your IRS account

An IRS transcript records your tax filings and transactions with the Internal Revenue Service (IRS). These transcripts contain various codes representing different actions and statuses related to your tax account. Understanding these codes can help you decipher the information on your transcript and clarify your tax situation. Here’s a comprehensive guide to the most essential codes you might encounter on your IRS transcript.

What is an IRS Transcript?

An IRS transcript is a summary or a record of your tax returns, including information such as the types of income you reported, the taxes you paid, and any actions the IRS took on your account. These transcripts come in several types, including:

• Tax Return Transcript: Summarizes the tax return as filed.
• Tax Account Transcript: Summarizes the changes made after filing.
• Record of Account Transcript: Combines both tax returns and tax account transcripts.
• Wage and Income Transcript: Shows data from forms like W-2s and 1099s.
• Verification of Non-Filing Letter: Confirms that you did not file a return.

The IRS provides free transcripts through various methods, including online, by phone, or by mail​.

Common IRS Transcript Codes and Their Meanings

Understanding the codes on an IRS transcript can be challenging, but it is crucial for managing your tax affairs effectively. The three-digit code signifies an Internal Revenue Service action related to your taxes, such as a credit or debit. The codes help create a history of your account. A reversed transaction is signified by an “R” following a transaction code.

Below is a list of some of the most important and common IRS transcript codes:

1. Code 150 – Tax Return Filed
   1. It indicates that your tax return has been filed and the IRS has received it.
   2. It is the baseline code showing the initial filing status of your return.
2. Code 806 – W-2 or 1099 Withholding
   1. Represents the total amount of federal income tax withheld from your wages or other income as reported on W-2 or 1099 forms.
3. Code 766 – Credit to Your Account
   1. Indicates a refundable credit applied to your account, such as the Earned Income Credit or Additional Child Tax Credit.
4. Code 768 – Earned Income Credit
   1. Specifies the amount of Earned Income Credit you are eligible for and have claimed on your tax return.
5. Code 826 
   1. This means that part of your tax refund was used to pay an existing tax debt.
6. Code 971 – Notice Issued
   1. Indicates that the IRS has sent you a notice. The specifics of the notice will be detailed in the letter you receive.
7. Code 846 – Refund Issued
   1. It indicates that a refund has been processed and sent to you. This code is crucial, as it indicates the completion of the refund process.
8. Code 977 – Amended Return Filed
   1. Shows that an amended return has been received and processed by the IRS.
9. Code 290 – Additional Tax Assessed
   1. It shows that additional tax has been assessed on your return. This could be due to an audit adjustment or other review.
10. Code 420 – Examination of Tax Return
    1. Indicates that your tax return has been selected for examination or audit by the IRS.

Common IRS codes to be aware of

You can view all of the IRS codes on their website, but here are some typically seen on tax returns:

1. 000: Adds a new taxpayer entity to the applicable Master File, a running record of IRS actions related to your account.
2. 011: Change Employer Identification Number (EIN), Social Security number (SSN) or plan number 
3. 013: Changes the name of the account or plan
4. 017: Adds or changes spouse SSN
5. 091: Revocation of being taxed as a small business
6. 177: Abatement of estimated tax penalty
7. 424: This is an examination request indicator; your return was referred to the Examination or Appeals Division 
8. 425: Reversed transaction code 424
9. 810: Refund freeze
10. 811: Reverse refund freeze
11. 9001: An error code that shows an attempt to access information using the wrong SSN or Taxpayer Identification Number (TIN) 

How to Interpret IRS Transcript Codes

Interpreting IRS transcript codes involves understanding the context in which they appear. Often, multiple codes will be listed together, providing a sequence of actions taken by the IRS. For example, you might see Code 150 indicating that your return was filed, followed by Code 806 for your withholding, and then Code 846 showing that a refund has been issued.

Each code may also contain additional information, such as dates, amounts, and references to IRS notices or letters. This detailed information can help you track the progress of your return and understand any issues that might arise.

Why Are IRS Transcript Codes Important?

IRS transcript codes are important for several reasons:

• Transparency: They clearly record all actions taken on your tax account, ensuring transparency.
• Issue Resolution: Understanding these codes can help you resolve issues with your tax return more efficiently. For example, if you receive a notice indicating an additional tax assessment, you can refer to the relevant codes on your transcript to understand why.
• Verification: They allow you to verify that all reported income and withholdings are accurately recorded, which is crucial for avoiding penalties and ensuring accurate tax filings.