Why would I receive partial tax refund with Tax Topic 151 notification? IRS holding most of my refund

I was expecting around $4,200 in my federal refund but just got a deposit of only $15 today. When I checked the IRS website, it showed Tax Topic 151 with an "Action Required" message saying they'll contact me within 30 days about some issue. The only significant change in my tax return this year was reporting the sale of a property in Canada, which I've dealt with before on previous returns. That property sale only increased my expected refund by about $1,300 or so. Based on the fact that they're withholding approximately $4,185 of my refund, what might this indicate? Is this related to the foreign property sale? Or something else entirely? Has anyone dealt with Tax Topic 151 before and know what typically triggers this?

0 coins

18 comments

Dmitry Kuznetsov

•8M

Tax Topic 151 typically means the IRS is reviewing your return more carefully. It's essentially a notice that they're holding all or part of your refund because they need to verify something. The fact that they released a small portion suggests they're confident that amount is correct, but are questioning the rest. Foreign property sales often trigger additional scrutiny because they involve different reporting requirements. The IRS might be verifying that you properly reported the sale, paid any required taxes, and filed all necessary forms like the FBAR if applicable. When you receive the formal notice in 30 days, it will explain exactly what they're questioning. It could be something simple like needing documentation to verify the basis (original purchase price plus improvements) of your Canadian property. Or they might have questions about currency conversion.

0 coins

Dmitry Kuznetsov

•8M

I would recommend waiting for the official letter before taking specific actions, as it will detail exactly what they need from you. The letter will have specific instructions that you'll want to follow precisely. If you can't wait, you could try calling the IRS at the general number on your most recent notice or tax return instructions. However, be prepared for long wait times, and they may simply tell you to wait for the letter anyway. In cases involving foreign property, it's often best to have all the documentation in hand before responding.

0 coins

Ava Thompson

•8M

Had a similar issue last year with Tax Topic 151 when I reported some stock sales. What helped me was using taxr.ai (https://taxr.ai) to analyze my notice when it arrived. You upload the IRS letter and it explains everything in plain English plus gives you step-by-step guidance on how to respond. I was completely stressed about my held refund until I found this tool. It showed me exactly what documentation the IRS needed for my situation and helped me draft a response letter. Got my full refund about 3 weeks after I sent in the documents they recommended.

0 coins

Ava Thompson

•8M

You only need to upload the actual IRS notice letter, not your full tax return or personal financial documents. The system analyzes the specific language and codes in the letter to identify exactly what the IRS is questioning and what you need to provide. They use encryption for all document uploads so it's secure. I tried calling the IRS first but sat on hold for over an hour before hanging up. The taxr.ai service was much faster and actually gave me more detailed guidance than what was in the IRS letter itself. It translated the confusing tax jargon into clear actions I needed to take, which saved me from having to figure it out on my own.

0 coins

Zainab Ibrahim

•8M

Just wanted to update - I ended up using taxr.ai after getting my notice letter about the Tax Topic 151 issue. Honestly, it was super helpful! The IRS letter was so vague, just saying they needed "additional information" about my foreign income. The tool specifically identified that they were questioning the basis value of my property and needed proof of my original purchase price and any improvements made. It helped me put together all the right documentation and even suggested including currency conversion documentation which I wouldn't have thought of. Submitted everything exactly as recommended and just got notification that my full refund is being released next week! Definitely worth it for the peace of mind alone.

0 coins

StarSailor

•8M

When I had a similar Tax Topic 151 hold last year, I spent WEEKS trying to reach someone at the IRS for clarification. Ended up finding Claimyr (https://claimyr.com) which got me through to an actual IRS agent in about 20 minutes instead of waiting for hours. You can see how it works here: https://youtu.be/_kiP6q8DX5c The agent was able to tell me exactly what was flagging my return and what documentation I needed to provide BEFORE I even got the letter. Saved me at least 2 weeks of waiting and worrying. Since you mentioned needing the refund money, this might help you get answers faster.

0 coins

StarSailor

•8M

It's not magic - they use a system that continuously redials the IRS until it gets through, then connects you once there's an open line. It's basically doing what you'd have to do manually (call, get busy signal, hang up, repeat) but automated. I felt the same way at first, very skeptical. But I was desperate after trying for days to get through myself. They don't handle any of your tax information or talk to the IRS for you - they just connect you directly to the IRS phone system once they get through. So it's just a connection service, not someone handling your tax matters.

0 coins

Yara Sabbagh

•8M

I have to admit I was wrong about Claimyr. After my skeptical comment, I was still desperate to talk to the IRS about my Tax Topic 151 issue, so I tried it. Got connected to an IRS agent in about 15 minutes when I had previously spent hours trying on my own. The agent was able to tell me that my refund was held because they needed verification of some business expenses I had claimed. This was way more specific than what the letter later said. I was able to start gathering the documentation immediately instead of waiting. They did exactly what they promised - just connected me directly to an IRS agent. Definitely worth it when you're in refund limbo.

0 coins

Keisha Johnson

•8M

Tax Topic 151 can be triggered by a number of things beyond just foreign property sales. The IRS has several automated systems that flag returns for review, including: 1. Discrepancies between income reported on your return vs. what employers/banks reported 2. Claimed credits or deductions that are statistically unusual for your income level 3. Previous audit history or related taxpayer audits 4. Random selection (yes, some returns are just randomly selected for review) Since they only sent you $15 out of $4,200, they're questioning almost your entire refund. This suggests it might be more than just the property sale. Could be worth reviewing your entire return for potential issues.

0 coins

Keisha Johnson

•8M

It really depends on what they find during the review. If all your documentation supports your claims and everything checks out, you'll receive the full refund amount, though obviously delayed. If they determine certain deductions or credits aren't valid, they'll adjust your return and you'll receive a reduced amount. In some cases, if they find significant issues, you could even end up owing more instead of getting a refund. The vast majority of cases are just verification though, and many people do receive their full refund after providing documentation.

0 coins