Understanding IRS Transcript Codes 570 and 971 - What Do They Mean?

Those codes typically appear together and usually indicate the IRS is reviewing something on your return. Code 570 is "additional account action pending" which means they've temporarily frozen your refund while they look into something. Code 971 means they're sending you a notice explaining what's happening. In many cases, this is just a verification process and not necessarily bad news. The IRS might be verifying income, deductions, or credits you claimed. Sometimes it's random selection for review. The notice (which should arrive within 1-2 weeks) will explain exactly what they need from you, if anything. If you look at the dates next to these codes on your transcript, it might give you clues about timing. Often you'll see another code (571) appear later, which means they've resolved the hold.

I had the exact same codes last filing season and was freaking out too! After doing some research, I found this tool called taxr.ai (https://taxr.ai) that helped me decode my transcript. You just upload your transcript file and it explains all the codes in plain English and what actions you should take. For me, it showed that my 570/971 combo was because they were verifying my earned income credit, and taxr.ai predicted accurately that I'd receive my refund in about 3 weeks after the initial hold. The best part was that it showed me exactly what the notice would likely say before I even received it in the mail, which saved me a ton of anxiety. It also provided a timeline prediction based on thousands of similar cases.

Just wanted to follow up - I used taxr.ai after seeing this post and it was super helpful! My transcript had codes 570 and 971 too, plus some other weird ones like 766 and 768. The tool explained that mine was just a random review of my child tax credit claim and showed that most similar cases were resolved within 21 days. It was spot on - I got my notice in the mail exactly when it predicted (asking for proof my kids lived with me), I uploaded the documents they wanted, and my refund was approved 18 days after the initial hold. The peace of mind was worth it instead of stressing for those three weeks wondering what was happening.

If you're trying to contact the IRS about these codes, good luck getting through their phone system. After seeing 570/971 on my transcript last year, I spent HOURS trying to reach someone. Finally found this service called Claimyr (https://claimyr.com) that got me through to an actual IRS agent in about 15 minutes instead of waiting on hold all day. They have a demo video showing how it works: https://youtu.be/_kiP6q8DX5c In my case, the IRS agent was able to tell me exactly what was triggering the review (they needed verification of my business expenses) even before I got the official notice. This let me start gathering documents early instead of waiting for the letter, which sped up the whole process.

I have to admit I was wrong about Claimyr. After posting my skeptical comment, I decided to try it myself since my transcript showed those 570/971 codes too and I was getting nowhere with the IRS. It actually worked! Got a call back in about 40 minutes and spoke to an IRS rep who explained my return was flagged because I had reported some unemployment income. They just needed to verify some information, and the agent was able to clear it right on the call. My transcript updated two days later with code 571 (release of hold) and my refund was direct deposited a week after that. Saved me weeks of waiting for a notice and then responding by mail. Definitely worth it for the time saved and anxiety reduction.

I've seen those codes many times (I do tax prep). A few things to check that might give you more info: 1. Look at the cycle code on your transcript (should be something like 20230805). The first two digits (20) are the year, next two (23) are the week of the year your return was processed. This can help estimate timing. 2. Check if there are any specific credits or deductions that might trigger review - EITC, Child Tax Credit, education credits are common ones. 3. Sometimes if there's a big difference between this year's return and last year's, it can trigger a review.

Has anyone here ever had these codes and then had their refund actually reduced? I'm seeing 570/971 on mine too but also code 420 which apparently means "examination of tax return" which sounds even more ominous!