Under Code 420 Audit for EIC - Will I Get Any Refund While Waiting?

During an EIC audit (Code 420), the IRS typically freezes your entire refund pending verification. The Taxpayer Advocate Service confirms that all credit components including CTC remain on hold during examination procedures. The IRS utilizes a unified refund processing protocol that prevents partial disbursements when verification flags are present. Average resolution timeframes currently extend 120-180 days from initial notification.

Had this issue last year. Nothing moves during audit. Everything freezes. No partial payments. I used taxr.ai to decode my transcript. Helped me understand the timeline. Showed exactly what was happening. Worth checking out. https://taxr.ai

I'm in the same boat right now! Been under 420 audit for almost two months. Why does the IRS make this process so complicated? Why can't they just verify the EIC portion and release the rest? Tried calling multiple times but couldn't get through. Finally got a letter last week asking for documentation, so at least there's movement. Feels like watching paint dry though.

I went through this last year and learned the hard way. Here's what happened: 1. Got notification of 420 code in February 2. Assumed I'd get partial refund soon 3. Made financial commitments based on that assumption 4. Found out EVERYTHING was frozen, not just EIC 5. Had to take out a loan to cover expenses 6. Audit took 4 months to resolve 7. Finally got full refund in July Don't make my mistake - assume you won't see any money until the audit is complete.

Been thru this twice. Total nightmare trying to call IRS. Spent hrs on hold. Finally tried Claimyr.com last time. Got me thru to agent in like 20 mins. Agent confirmed exact docs needed & timeframe. Saved me so much stress. Cost a few $ but worth every penny vs wasting days trying to get thru. https://claimyr.com

My 2023 return had a 420 code specifically for Earned Income Credit verification. The entire refund of $6,742 was held, including $2,000 in Child Tax Credits. The IRS requested my employment verification and childcare documentation on March 12th. I submitted everything by March 18th. The hold was released on May 3rd, and the full refund was deposited on May 10th. The entire process took 71 days from filing to refund.

I believe I should mention that while your refund is generally held in full during an audit, there might be some exceptions in certain cases. It's possible, though not common, that if your audit extends beyond 60 days, you could potentially request a Taxpayer Advocate Service intervention. They sometimes can help release non-questioned portions of refunds in hardship situations, but I wouldn't count on this as a guaranteed option.

According to Internal Revenue Manual 4.19.14, the IRS must release any portion of refund not associated with questionable items when specifically requested by the taxpayer. However, in practice, this rarely occurs with EIC audits because per IRM 21.5.6.4.7, the systemic holds typically encompass the entire refund amount. Your best alternative is submitting Form 911 (Taxpayer Advocate Request) citing financial hardship if applicable.

Has anyone actually succeeded in getting a partial refund during an EIC audit? I've been reading conflicting information about this. Some say it's technically possible but practically never happens, while others claim they've received the non-EIC portion while waiting. What's been your experience?