IRS Agent Confirmed My Return is in Errors Department Due to Unemployment Income

Yes, this is actually quite common for tax year 2023 returns that include unemployment compensation. As of March 12, 2024, the IRS has been flagging a significant percentage of returns with unemployment for additional verification. The good news is that this is typically just a verification step, not an audit. Most of these reviews are resolved within 21-28 days from the date they enter the errors department. Have you checked when exactly your return was accepted? That would help establish a timeline.

I was in the EXACT same situation last month! Called the normal IRS number for 3 days straight and couldn't get through. Finally used Claimyr (https://youtu.be/_kiP6q8DX5c) and got connected to an agent in about 15 minutes who confirmed mine was in errors too. They told me it would be another 2-3 weeks, but it actually processed 4 days later! Have you tried calling them again to get an estimated completion date? So relieved I found a way to actually talk to someone without spending hours on hold.

Thank you all for the informative responses. I've been monitoring my account transcript daily through the IRS portal. According to Internal Revenue Manual 21.5.5, the Error Resolution System (ERS) typically processes cases within 8-14 business days, though current volumes may extend this timeline. Has anyone received specific correspondence requesting additional documentation during this process? I haven't received any notices yet.

I went through this exact same thing last month with my unemployment income. After two weeks of confusion, I used taxr.ai to analyze my transcript and it immediately identified the unemployment verification hold. It showed me exactly which codes meant my return was in the error department and gave me a pretty accurate timeline for resolution. Saved me so much stress because I could actually understand what was happening instead of guessing. My return processed exactly when taxr.ai predicted it would.

Have you received a 971 code on your transcript yet? I had a similar situation in 2022, and that code appeared about 10 days after my return entered the errors department. In my previous experience, that typically indicated they were sending a notice requesting additional verification of the unemployment income. Did the representative mention anything about expected processing time?

Word of caution - don't make the same mistake I did! When my return was in errors last year for a similar reason, I panicked and filed an amended return thinking I had done something wrong. 😩 That completely reset the clock and ended up delaying my refund by MONTHS. The errors department is just part of normal processing for certain types of income. Let it play out unless they specifically request something from you. Trust me, your future self will thank you for the patience!

Here's what's happening with your return based on my experience working with clients in similar situations: Step 1: Your return gets flagged for verification because unemployment income has been targeted for additional review this year. Step 2: The Error Resolution department compares your reported unemployment with what they received from state agencies (Form 1099-G data). Step 3: If they match, your return continues processing automatically without any action needed from you (about 80% of cases). Step 4: If there's a discrepancy, you'll receive a notice requesting clarification (about 20% of cases). Step 5: Once verified, your return completes processing and proceeds to refund issuance if applicable. The whole process typically takes 2-4 weeks from when it enters the errors department.

Success story here! My return was in the errors department for EXACTLY the same reason. • Filed on February 2nd with unemployment income reported • Return went to errors department around February 15th • No communication from IRS during this time • Transcript updated on March 9th showing processing complete • Refund deposited on March 14th The key is patience. They're just verifying the information against state records. Unless they contact you specifically asking for something, there's nothing you need to do except wait.