IRS Transcript Help: Credits Reduced by $4,880 (Codes 767/765) and Interest Charged $275 After Amended Return

The transcript shows significant adjustments to your tax account across multiple dates. The most recent activity shows you filed an amended return (codes 971/977) on October 11, 2024, which is currently being processed under reference number 43277-696-04828-4. The most substantial changes occurred on April 15, 2024, when the IRS reduced two credits: - A $3,144 reduction in your earned income credit (code 765) - A $1,736 reduction in another credit (code 767) These reductions total $4,880 in decreased credits On February 17, 2025, there were three additional changes: - A reduction in your prior tax assessment of $848 (code 291) - An interest charge of $275.21 for late payment (code 196) - A notice issued about these changes (code 971) The presence of multiple adjustment codes and an interest charge suggests the IRS found discrepancies in your original return that affected your credit eligibility. The reference number 09254-410-06319-5 is associated with these changes. You should carefully review any notices received from the IRS explaining these adjustments, particularly regarding your eligibility for the earned income credit, as this represents the largest adjustment.

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those interest charges are brutal fr fr 🤮

stuck in the same boat with reduced credits. its been 4 months and still waiting 😤

Did you get any notices in the mail explaining the reductions?

the IRS is such a mess rn like why they gotta make everything so complicated

Looking at your transcript, the timing of these adjustments is really telling. The IRS reduced your credits in April 2024, but you didn't file your amended return until October 2024 - that 6-month gap is likely what triggered the interest charges. The $375.21 interest charge (code 196) is calculated from when the credits were reduced until payment was made or adjusted. That "20250505" date you mentioned is probably a cycle date for when the interest calculation runs. Code 291 showing -$1,848.00 is actually a credit to your account (the negative amount means money back to you), so that's good news. However, you're still net negative about $3,400 after all adjustments. Since your amended return is still processing (forwarded status), I'd recommend calling the IRS at 1-800-829-1040 to get a status update. They can also explain exactly why the EIC and other credits were reduced - sometimes it's income verification issues or dependent eligibility problems. Keep that reference number 43277-696-04828-4 handy when you call.

I see you're dealing with some really stressful adjustments. The good news is that code 291 showing -$1,848 is actually money coming back to you (negative amounts are credits on IRS transcripts). For the interest charges, they typically stop accruing once you've filed the amended return and any balance due is resolved. The cycle date 20250505 that @ad2cf07795b8 mentioned is when the IRS runs their interest calculations - it doesn't necessarily mean more interest will be charged, but rather when they process interest adjustments. Since your amended return shows "forwarded for processing," you're in the queue but these can take 16-20 weeks to fully resolve. The key thing is to watch for any CP notices in the mail that will explain exactly why the EIC and other credits were reduced. Those notices usually arrive 2-4 weeks after the transcript shows "notice issued." One thing to keep in mind - if the amended return resolves the issues that caused the original credit reductions, you might get some or all of those credits restored, which could significantly change your final balance.

I'm going through something very similar right now! Had my EIC reduced by over $3,000 and got hit with interest charges too. What really helped me understand everything was calling the Taxpayer Advocate Service at 1-877-777-4778 - they're independent from the IRS and can explain what's happening without all the confusing jargon. From what I learned, those credit reductions usually happen when the IRS can't verify income or dependent information during their automated review process. The interest starts accruing from the original due date of the return, which is why you're seeing charges even though you filed the amended return later. The good news is that if your amended return addresses whatever triggered the original adjustments, you could get those credits restored plus have the interest removed. I'd definitely keep checking your transcript weekly - sometimes the "Where's My Amended Return" tool doesn't update as quickly as the actual transcript does. Hang in there - I know how stressful this whole process is! 💪

Looking at your transcript, I can see why you're stressed - those are some significant adjustments! The key thing to understand is that codes 767 and 765 (your credit reductions totaling $5,080) happened back in April 2024, but your amended return wasn't filed until October 2024. That 6-month gap is likely what triggered the interest charge. The good news is that code 291 showing -$1,848 is actually money being credited back to your account (negative amounts are refunds on IRS transcripts). So while you lost $5,080 in credits, you're getting $1,848 back, making your net loss around $3,232 plus the interest. Since your amended return is still processing (the "forwarded for processing" status), there's still hope that some or all of those original credit reductions could be reversed if the amendment addresses whatever triggered them. The IRS usually reduces EIC when they can't verify income or dependent eligibility, so make sure your amended return includes all supporting documentation. I'd recommend calling the Practitioner Priority Service at 1-866-860-4259 if you can get a tax pro to call for you, or try the Taxpayer Advocate Service at 1-877-777-4778 - they're much better at explaining these complex situations than regular IRS customer service. Keep that reference number 43277-696-04828-4 handy when you call!