IRS Exam Code 420 on Transcript: Head of Household Return with $9,785 Refund Under Review?

Yes, unfortunately code 420 means your return is being examined (audited). The code 570 means they've frozen your account until the examination is complete. The 971 codes indicate they've sent you notices - you should receive these in the mail soon explaining what they're reviewing. Typically when there's an EIC claim involved, they might be verifying your eligibility for the credit. This is a pretty standard review process that happens with many EIC claims, especially with Head of Household status. You have a couple options: 1. Wait for the notices and respond with whatever documentation they request 2. Call the IRS examination department directly (the number will be on the notice) 3. You can try calling the general IRS number but expect long wait times These reviews can take 45-120 days depending on how quickly you respond and how backed up they are. I'd recommend gathering documentation that supports your Head of Household status and EIC eligibility now, so you're ready when the notice arrives.

When I had this issue last year, I was completely lost trying to figure out what was happening with my return. I finally used taxr.ai and it explained everything in plain English - told me exactly what the codes meant, why my refund was delayed, and what documents I'd need to have ready. Saved me hours of stressing and googling random tax codes! The tool is insanely good! I use it every week to check for updates on my transcript because it translates all that IRS jargon into something I can actually understand. https://taxr.ai

I had the exact same issue with code 420 last April. Kept checking WMR everyday like a madman but nothing changed for weeks. Finally got fed up and used this calling service called Claimyr that got me through to an actual human at the IRS instead of waiting on hold forever. The agent explained they needed proof for my dependents and EIC claim. Got the issue resolved in about 20 minutes on the phone and my refund was released two weeks later. Honestly the best money I've ever spent after trying to call the IRS myself for days with no luck. Check them out at claimyr.com if you're tired of waiting.

Code 420 is basically the IRS saying "we need to take a closer look at your return." Almost always happens with EIC claims, especially with Head of Household filing status. They're cracking down hard on improper EIC claims this year. Make sure you have docs proving your dependents lived with you for more than half the year - school records, medical records, benefit statements, etc. They probably sent you a 566 letter requesting additional info.

Don't panic! The IRS does random reviews all the time, and they flag TONS of EIC claims for verification. It doesn't mean you did anything wrong. Just gather your documentation now so you're ready when they ask. Last year they verified my EIC and it took about 8 weeks total before my refund was released.

I've been through this 2 years in a row. 🙄 Their system flags returns with EIC and head of household for extra scrutiny. Make sure you have proof that your dependents lived with you for more than half the year. The IRS loves school records, medical bills, benefit statements showing your address and kids names. Anything official with both your address and their names on it. It's annoying but if you have the right docs it's just a matter of waiting.

This is why i always file paper returns. Electronic returns get more flags and reviews. I know it takes longer initially but at least i don't deal with this audit nonsense every year.

the codes on ur transcript tell a story: 150 (return filed) -> 806/766/768 (credits/refund calculated) -> 810/811 (temp freeze that was removed) -> 420/570/971 (examination started, refund frozen, notices sent). basically they started to process ur refund normally, then their system flagged something that needed review. most common reason = EIC verification.

I worked for the IRS for 12 years (retired now). Code 420 means they're reviewing your return, specifically for the earned income credit based on your transcript. They're probably verifying that you qualify for head of household and that your dependents meet the requirements for EIC. The 570 means they've frozen your refund until the review is complete. You'll get a letter (that's what the 971 codes are) asking for specific documentation. Answer EXACTLY what they ask for - no more, no less. If you send too much info it can actually delay things more.

lmao welcome to tax season hell 2023 edition. the IRS is so underfunded and understaffed they're just throwing darts at a board to decide which returns to review 🤡

Have you tried checking the Where's My Refund tool on irs.gov? Sometimes it will give you more specific info than the transcript codes.

Just fyi, code 971 means notices were GENERATED, not necessarily sent yet. So you might not receive them for another week or so. The IRS is notoriously slow with mail.

Can't believe no one has said this yet but check the USPS Informed Delivery service if you have it! You can see what mail is coming to you before it arrives. Might give you a heads up on those IRS notices before they hit your mailbox.

Let me tell u from experience... calling the IRS is a complete WASTE of time unless u can actually get through to someone. I spent 3 weeks trying to call about my audit last year and never got through. Finally broke down and used claimyr.com and had an agent on the phone in 2 hours. They got me straight to the examination department who explained exactly what was happening with my return. Talking to an actual agent got my refund released within days. Without that I'd probably still be waiting lol.

Just a heads up - I had a similar situation last year with EIC verification. When you do get the notice, respond ASAP and send EVERYTHING they ask for the first time. Don't make them ask twice or it will drag on forever. I sent my docs certified mail with tracking and kept copies of everything. Got my refund about 60 days after I responded to their request.

ugh the IRS and their stupid codes. why cant they just use plain english?? so frustrating trying to decode this stuff. i had to use taxr.ai last month to figure out what was happening with my return because the transcript looked like hieroglyphics to me. it actually explained everything clearly and told me what to expect next. saved me from having an anxiety attack lol https://taxr.ai

I've been an enrolled agent for 15 years and see this alllll the time with my clients. Code 420 is an examination (audit) indicator. Combined with 570, it means they're reviewing your return and have frozen your refund pending the outcome. Based on your filing status (HOH) and the EIC claim, they're almost certainly verifying your eligibility for both. This is extremely common - the IRS has been directed by Congress to thoroughly verify EIC claims due to historically high improper payment rates. Wait for the notice (971 code indicates it's coming) and respond promptly with exactly the documentation requested. Most of these reviews are resolved in favor of the taxpayer as long as you can provide the required proof. In the meantime, you can call the IRS exam department, but be prepared for long wait times. Good luck!

Isn't it CRAZY that we pay taxes but then have to become detectives to figure out what's happening with our own money? The whole system is so broken. Good luck OP, hope you get your refund soon! 🙏