360° Coverage : Delayed Tax Refunds, TC 570 And An Important Distinction

2 Updates
Delayed Tax Refunds, TC 570 And An Important Distinction
Photo Credit: Forbes Business

Delayed Tax Refunds, TC 570 And An Important Distinction

Mar 1 2014, 7:59pm CST | by

By the stats, the current tax season has been quite a success. The Internal Revenue Service is reporting that, despite an abbreviated season, they are processing tax returns and issuing tax refunds...

Filed under: news

 
 
 

29 weeks ago

Delayed Tax Refunds, TC 570 And An Important Distinction

Mar 1 2014, 7:59pm CST | by

By the stats, the current tax season has been quite a success. The Internal Revenue Service is reporting that, despite an abbreviated season, they are processing tax returns and issuing tax refunds at a much faster pace than last year.

Of course, all of the numbers in the world don’t matter when the one number you’re counting on – your own refund – is affected.

This season, I’ve heard from a number of taxpayers experiencing tax refund delays (though certainly nothing near last year’s education credit snafu). Initially, the trouble seemed to focus on those 1121 codes. The IRS was made aware of the problem and did issue a statement, saying:

A very small percentage of taxpayers may see an 1121 reference number if they check “Where’s My Refund?” after they initially were provided a projected refund date by the tool. The IRS is aware of this situation, and emphasizes that the small group of taxpayers who see this reference number should continue checking Where’s My Refund for an update. If we need more information to process their return, we will contact them — usually by mail.

Most of the taxpayers who reached out to me regarding the 1121 issue – including Donna – have since reported that they’ve either received their refunds or updated information about the delay.

However, shortly after the 1121 issue was made public, the focus from taxpayers on social media – and in emails, direct messages and private messages to me – has zeroed in on another code that’s popping up over and over: TC 570. There is a notable difference between the 1121 code and the TC 570: the latter is not an explicit refund code. It appears not on the “Where’s My Refund?” tool but on a taxpayer’s transcript. That’s an important distinction.

I reached out to IRS to find out whether there was any sort of systemic issue causing taxpayers to see a TC 570 on their transcript. So far, the answer to that question is no. The IRS is, however, clearly aware of the concerns and had this to say:

A Transaction Code 570 can mean different things in different cases so a taxpayer should not try to draw a conclusion based on the presence of a TC 570. The Transaction Code 570 will stop a refund from being issued until the impact of the action being taken on the account and the refund is determined and processed. Transaction Codes are used internally by the IRS to identify a transaction, adjust and research tax accounts and to maintain a history of actions posted to a taxpayer’s account. While they are reflected on transcripts they are not reflected on most public facing documents or tools like Where’s My Refund because they are difficult to interpret and can have different meaning depending on the case and associated codes and files. Again, the best way for taxpayers to check the status of their refund is by going to Where’s My Refund.

It’s a statement worth repeating. The IRS uses a lot of internal codes on transcripts and they can mean different things. And what it means exactly isn’t always apparent to the person taking the call at IRS. Does that suck? Of course it does. Trust me. I’ve been on the end of those calls trying to decipher what’s going on for taxpayers. And I totally believe that taxpayers are calling IRS and getting two or three different answers about the status of their refund. And I believe that taxpayers deserve a better answer.

But I would caution taxpayers not to try and pick apart their tax transcripts in an effort to find answers. There is no “one size fits all” answer to the TC 570 – not even in the best of circumstances. It does not necessarily equate, as some have surmised, an audit. Nor does it means, as others have posited, that the refund is subject to an offset. It could mean those things – but again, you’re not going to be able to tell from a glimpse at your transcript this early in the season.

It reminds of me of this great scene in The Princess Bride:

Those codes? They don’t always mean what you think they mean.

I know that isn’t the answer that taxpayers want to hear. And trust me, I am continuing to pester IRS about these issues (believe me when I say that they have my number). But it’s not a certainty that a TC 570 on your transcript is anything sinister at this stage of the season. The data doesn’t appear to support it. And if there’s a real problem with your specific return, you’ll hear from IRS.

And yes, there have been problems. I have confirmed reports that a glitch in at least one program has resulted in the issuance of paper checks instead of direct deposit. Errors – mostly transposition of numbers – have slowed processing of other returns. There have been bounces for bad addresses. Returns have been held because of prior years when no returns were filed. And yes, identity theft continues to be a big problem especially when Social Security numbers for dependents have appeared on more than one return. Clearly, not everyone is having a smooth tax season.

By the numbers, however, most taxpayers are getting their refunds as quickly as anticipated. On average, the IRS expects to issue tax refund checks to 9 of 10 taxpayers in 21 days or less. Those are pretty good odds. But that still means that 1 in 10 taxpayers will receive refund checks after that 21 day window. That sounds like a pretty small number until you calculate the total against the number of refunds issued. The IRS expects to process about 140 million tax returns this season. In 2013, they issued more than 100 million tax refund checks. If 1 in 10 taxpayers get their refunds after 21 days, that still works out to about 10 million taxpayers. That’s more than the individual populations of 42 states. It’s more than the combination populations of Alabama and South Carolina, the 23rd and 24th most populous states. So, yes, it’s a lot. But the number of taxpayers who do receive their refunds within that 21 day window? That’s more than the combined populations of our most populous states (California, Texas and Florida) or more astoundingly, the combined population of 25 of our least populous states.

Does that help those taxpayers who are depending on refund checks that have not yet been deposited? Of course not. I know you want your money. And I know that in many cases, you’re depending on that money. But work through the right channels. Keep checking the “Where’s My Refund?” tool for information. If you are advised to call the IRS, do so. If you get mail from IRS, open it. But at this stage, it truly is a waiting game. If I hear anything further (and I am pursuing these issues), rest assured that I will post it as soon as it becomes available.

Want more taxgirl goodness? Pick your poison: receive posts by email, follow me on twitter (@taxgirl), hang out with me on Facebook or check out my YouTube channel. If you want to keep an eye on documents I’ve posted, check out my profile on Scribd. And finally, you can subscribe to my podcast on the site or via iTunes (it’s free).

Source: Forbes Business

 
Update
2

3 weeks ago

Khazanah throws MAS RM6b lifeline

Aug 29 2014 5:01pm CDT | Source: Business Times Singapore

August 30, 2014 1:15 AMKHAZANAH Nasional will inject RM6 billion (SS$2.4 billion) over three years to resuscitate loss-making Malaysia Airlines (MAS) under a recovery plan that includes even an Act of Parliament. Other key moves are migrating its operations, assets and liabilities to a new company (NewCo) and slashing the workforce of ...
Source: Business Times Singapore   Full article at: Business Times Singapore
 

 
Update
1

3 weeks ago

MAS posts loss of RM307m for Q2

Aug 28 2014 5:00pm CDT | Source: Business Times Singapore

August 29, 2014 1:13 AMMALAYSIA Airlines (MAS) registered a loss of RM307 million (S$122 million) for the second quarter to end-June, but warned of worse to come in the second half when the "full financial impact of the ...
Source: Business Times Singapore   Full article at: Business Times Singapore
 

 

Don't miss ...

 

<a href="/latest_stories/all/all/30" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.

 

blog comments powered by Disqus

Latest stories

Liquid metal batteries to herald new future
Washington, Sep 23 (IANS) Researchers have improved a liquid battery system that could enable renewable energy resources to compete with conventional power plants.
 
 
Obesity increases risk of stress-related diseases
New York, Sep 23 (IANS) If you are overweight, you may be at greater risk of contracting stress-related diseases like type 2 diabetes, heart disease and cancer, says a study.
 
 
Young and overweight? Try this exercise combo
Toronto, Sep 23 (IANS) Combining aerobics with resistance training may be the best exercise for obese teenagers, says a study.
 
 
Arctic Sea ice helps balancing CO2 level
London, Sep 23 (IANS) Arctic Sea ice removes carbon dioxide (CO2) from the atmosphere and if Arctic Sea ice is reduced further, we will be face an increase in atmospheric concentration of CO2, says a study.
 
 
 

Latest from the Network

No deal yet on new n-proposal: Iran
Tehran, Sep 23 (IANS) Ths parties present in the ongoing nuclear talks between Iran and the six world powers have not reached any agreement on the new proposal of the West as a step to resolve the nuclear issue of the...
Read more on Politics Balla
 
Tricks to switch from summer to autumn make-up
London, Sep 23 (IANS) Autumn season calls not only for wardrobe change, but also the makeover of make-up kit. An expert suggests how you can transform make-up from summer to autumn subtly. Natasha Daniel, a head make-...
Read more on Celebrity Balla
 
Syria confirms downing of its aircraft by Israel
Damascus, Sep 23 (IANS/EFE) Syria confirmed Tuesday that the Israeli military shot down one of its aircraft over the tense border between the two countries in the Golan Heights, Syrian state television reported. In a...
Read more on Politics Balla
 
Danny O'Donoghue doesn't own a car
Los Angeles, Sep 23 (IANS) Danny O'Donoghue, the lead singer of The Script band, has revealed that he doesn't own a car. In an interview with The Sun newspaper, the singer, who along with his bandmates has given hits...
Read more on Celebrity Balla
 
NRAI congratulates Bindra
London, Sep 23 (IANS) National Rifle Association of India (NRAI) president Raninder Singh congratulated Olympic champion Abhinav Bindra Tuesday for winning his first Asian Games individual medal, a men's 10 metre air...
Read more on Sport Balla
 
Arctic Sea ice helps balancing CO2 level
London, Sep 23 (IANS) Arctic Sea ice removes carbon dioxide (CO2) from the atmosphere and if Arctic Sea ice is reduced further, we will be face an increase in atmospheric concentration of CO2, says a study. Because of...
Read more on Politics Balla
 
Robert Pattinson, FKA Twigs get cosy
Los Angeles, Sep 23 (IANS) Rumoured couple Robert Pattinson and singer FKA Twigs were spotted getting cosy at Venice Beach in California. Fans captured the stars holding hands as they enjoyed a romantic stroll on the...
Read more on Celebrity Balla
 
Suicides by Indians in Oman on decline
Muscat, Sep 23 (IANS) There has been a fall in the number of suicides by Indians in Oman this year, according to Indian embassy data. On an average, five Indians committed suicide every month in 2013, but this year...
Read more on Politics Balla
 
Harpreet 7th in 25m rapid fire pistol qualifiers
Incheon, Sep 23 (IANS) India's Harpreet Singh finished seventh as Gurpreet Singh and Pemba Tamang failed to impress in the men's 25 metre rapid fire pistol qualification stage 1 of the Asian Games at the Ongnyeon...
Read more on Sport Balla
 
Afghanistan peace depends on US, Pakistan cooperation: Karzai
Kabul, Sep 23 (IANS) Outgoing Afghan President Hamid Karzai Tuesday said that returning durable peace to his conflict-ridden country depends on the cooperation from the US and Pakistan. "Peace in Afghanistan depends...
Read more on Politics Balla