971 IRS Code Explained

The 971 IRS code on your tax transcript indicates that the IRS has sent you a letter regarding changes that will be happening related to your tax return. There are many possible reasons for this change, and while this status can seem intimidating, it is usually nothing to worry about. Instead, this transaction code is utilized to inform the taxpayer that there may be delays in the processing of their tax return or the issuing of their tax refund.

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Key Takeaways:

  • The 971 IRS code listed on a tax transcript indicates there will be changes involving their tax return. Either the IRS will conduct an additional review of your tax return or they will request additional information from the taxpayer.
  • The amount listed on the 971 code line indicates the adjustment to the tax return amount.
  • IRS code 971 may be on your account to indicate an amended tax return, balance transferred to a duplicate account, bankruptcy notice, collection due, collection due with a Notice of Intent to Levy, duplicate notice sent to a spouse, duplicate tax return processed, or filing status of earned income tax filing status.
  • IRS Publication 971 is different than IRS code 971. IRS Publication 971 indicates a spouse being relieved from tax responsibility, such as through innocent spouse tax relief, equitable relief, and separation of liability relief. 

What Is The 971 IRS Code?

The 971 IRS code is a transaction code that can be observed on your transcript, indicating there will be changes involving your tax return. The official meaning of the IRS code 971 is the indication of “miscellaneous transactions.”

This indicates that either your tax return will be undergoing additional review by the IRS or there will be additional information needed for your tax return to be effectively processed. The IRS will generally contact the taxpayer to inform them of any action that must be taken.

The Amount on Code 971 Line Meaning

The amount listed on the 971 code line could indicate an adjustment to the tax return amount. Because there can be different IRS codes impacting this amount, the IRS will either update you further about the details or there will be an automatically updated refund amount listed in this section. 

The code line 971 listing an amount is for the taxpayer to reference, and they usually will not have to take action or make changes unless stated by the IRS.

Why IRS Code 971 Is On Your Account

There are several reasons why you may observe the 971 IRS tax code on your account. Any information and delays should be outlined in your tax transcript. Some of the reasons this code could be present on your account include:

  • Amending a tax return
  • Balance transferred to split liability account
  • Bankruptcy
  • Collection of tax payments due
  • A duplicate notice was sent to a spouse
  • A duplicate tax return was processed 
  • Filing status of earned income tax filing status            
  • Notice of Intent to Levy is issued     

What Is The Difference Between IRS Code 971 and IRS Publication 971?

IRS code 971 is listed on a tax transcript when changes are occurring regarding their tax transcript. IRS Publication 971 indicates a spouse being relieved from tax responsibility, such as through innocent spouse tax relief, equitable relief, and separation of liability relief. 

If you need help analyzing the codes and information listed on your tax transcripts, consulting with a tax professional like those at Ideal Tax can help you understand your tax situation and resolve any issues involving taxes.