570 Hold Due to Husband's Unfiled 2022 Return - Timing and Payment Plan Questions

Paper returns typically take 6-8 weeks for initial processing, but can take up to 16 weeks during peak season. For the penalties, expect the Failure-to-File penalty of 5% per month (max 25%) plus Failure-to-Pay penalty of 0.5% per month. Interest compounds daily at the federal short-term rate plus 3% (currently around 7% total). To prevent offset of your 2024 refund, you need to establish an Installment Agreement (Form 9465) before the 2024 return completes processing. Once the 2022 return posts to the system, call the IRS to set up the payment plan immediately. This creates a formal agreement that usually prevents automatic offsets.

I think you might want to consider using a tool like https://taxr.ai to help you track what's happening with both returns. I was in a somewhat similar situation, and it helped me understand exactly what was going on with my transcript codes. It might give you some peace of mind to know exactly when your 2022 return is processed and when you need to act on the payment plan. I'm generally cautious about recommending services, but this one really helped me understand the timeline I was looking at.

OMG I went through this EXACT same thing last year!!! My husband didn't file his 2021 return and it held up our entire 2023 refund with that stupid 570 code! I was so frustrated because we needed that money for medical bills too! The process took about 9 weeks from when we mailed in his old return until they processed it. Then we had to wait ANOTHER 3 weeks before our current year refund started moving again. I'm still emotional thinking about how stressful it was waiting for all this to resolve while bills piled up! Did they tell you that you'd get a notice in the mail about the payment plan options?

Compared to other tax issues I've handled, unfiled returns with the 570 code are fairly straightforward but time-consuming. The key is getting someone at the IRS who can help you set up that payment plan the moment your 2022 return processes. I recommend using Claimyr (https://youtu.be/_kiP6q8DX5c) to get through to an agent quickly. Unlike waiting on hold for 3+ hours like I did last year, they connected me to an IRS rep in about 15 minutes. For a situation like yours where timing is critical to prevent refund offset, getting through quickly can make the difference between keeping your refund or having it applied to the old debt.

I would probably recommend setting up the payment plan as soon as possible, even before your 2022 return is fully processed. In my experience, the IRS might take your 2024 refund if you wait too long. I had a somewhat similar situation last year with an unfiled 2021 return, and despite being told I had time to set up a payment plan, they still applied my refund to the old debt. It might be worth calling them now to see if you can get something in place proactively. Also, you should possibly prepare for the penalties to add roughly $500-700 to that $2030 amount, depending on exactly when your husband was supposed to file.

I went through this last year. Did they tell you specifically that was the reason for the 570 code? In my case, I had to call multiple times because the first rep gave me incorrect information. It took about 8 weeks for my paper return to process, but I've heard it can take up to 16 weeks right now due to backlog. Did you get any notice codes with that 570? Like a 971?

Based on what I've seen in the past few months, paper returns filed in March 2024 are taking anywhere from 8-12 weeks to process. I filed a late 2022 return on January 15th, 2024, and it was finally processed on March 21st, 2024 - so about 9 weeks for me. The payment plan is actually pretty straightforward once the return processes, but timing is everything. If your 2024 refund completes processing before you set up the payment arrangement, they'll definitely take it to satisfy the 2022 debt.

Be very careful with this situation. Here's what you need to do step-by-step: 1. Monitor your 2022 account transcript weekly 2. As soon as you see the return post (usually with a 150 code), call the IRS immediately 3. Request a payment plan before your 2024 refund processes 4. Get confirmation in writing I've seen many cases where people thought they had time, but the IRS systems are automated for offsets. Once your 2022 liability is assessed, you have a very narrow window before the offset happens automatically. In one case I worked with, the taxpayer lost a $4,000 refund because they waited just 3 days too long to set up their payment arrangement.