An official website of the United States Government. I just checked mine and have the same message. document.getElementById( "ak_js_4" ).setAttribute( "value", ( new Date() ).getTime() ); Sarah E. Nieschalk is an Enrolled Agent who specializes in federal and state tax collections controversy and representation. How Do I Respond to an IRS Reference Number 1242? notice of deficiency has been mailed. The IRS uses code 1242 to indicate in its system that your return was received and is under review. Intuit, QuickBooks, QB, TurboTax, ProConnect, and Mint are registered trademarks of Intuit Inc. It is the only office where you can file an administrative appeal when you disagree with a decision made by the IRS. If you have outstanding student or child support loans, the IRS will use your refund to pay off those debts. In other cases, it may still be a good idea. When using TurboTax to file your taxes, we help detect common problems such as these so you can avoid errors that make it take longer to receive your refund. In contrast, if you agree with the IRS numbers, you should pay the debt. I prepared my taxes through FreeTaxUSA, one of IRS's free tax file partners. Investor Junkie is a financial publisher that does not offer any personal financial advice or advocate the purchase or sale of any security or investment for any specific individual. The code 1242 means, you need to supply IRS some more additional information such as a birth certificate showing for your child, etc. Call this automated line to get offset details 18003043107 Dial 7 wait a second, then 1 wait a few more seconds and then 1. *SuperMoney is not responsible for third party products, services, sites, recommendations, endorsements, reviews, etc. The Internal Revenue Service (IRS) publishes many tax topics, which it uses to provide detailed information on different aspects of IRS tax collection. This way, you wont have to deal with any paperwork at all.if(typeof ez_ad_units != 'undefined'){ez_ad_units.push([[250,250],'pineapplemoney_com-banner-1','ezslot_5',110,'0','0'])};__ez_fad_position('div-gpt-ad-pineapplemoney_com-banner-1-0'); The IRS Tax Topic 151 is a notice sent to taxpayers with an outstanding debt with the agency. Opinions are the author's alone, and this content has not been provided by, reviewed, approved or endorsed by any advertiser. By clicking "Continue", you will leave the Community and be taken to that site instead. handles taxpayer disputes with the IRS over things like income tax, estate tax, gift tax, and certain other taxes. The IRS routinely reviews tax returns for fraud. I listed the definitions below you can also visit the IRS Website www.irs.gov to 3030 566 Comments Share This can be done for various credit claims such as the earned income credit or any of the education credits. Tax Topic 151 means your return is under review. Did the information on this page answer your question? Business Loans for New Businesses: What You Need To Know ? I have filed same EIC for my 3 kids for 17 yrs now. Your return will remain frozen in the IRSs system until the review process is complete. Your name, address, and the best phone number to reach you, A clear statement that you intend to appeal the IRS findings to the Appeals Office, A copy of the IRS letter that lays out the findings you disagree with, The tax periods or years relevant to your dispute, A list of the actions or changes you dont agree with and the specific reasons why you disagree, References to any laws that your argument relies on. If you are going to pay the debt or appeal the tax offset then there are different procedures that have to take place. If you have any outstanding debts with a federal agency like the IRS, this can decrease your refund amount. We may, however, receive compensation from the issuers of some products mentioned in this article. faxed over info on 04/05. Sign up for our newsletter for tax tips & tricks! to receive guidance from our tax experts and community. Home Equity Loan vs. Line of Credit: Which Should You Choose? Free Edition tax filing. If you decide to request an appeals conference. Or they are still reviewing what I send so confused. According to the IRS, 9 out of 10 tax refunds are processed in their normal time frame of fewer than 21 days. A relevant article by the tax professionals at. After submitting your tax return you may see the following message with reference to code 1242 and Tax Topic 151 on the IRS status . Here we'll take a closer look at both of these options. document.getElementById( "ak_js_1" ).setAttribute( "value", ( new Date() ).getTime() ); document.getElementById( "ak_js_2" ).setAttribute( "value", ( new Date() ).getTime() ); document.getElementById( "ak_js_3" ).setAttribute( "value", ( new Date() ).getTime() ); Community Tax, LLC Having a tax professional help you file your appeal will prevent you from making mistakes that could cost you. Here is some information on Tax Topic 151 & 152 that many people asked for. Self-employed taxes. ago If you submit your return electronically, you should get the IRS tax topic letter around 21 days after filing. One of these, tax topic 151, concerns your rights to appeal when the IRS withholds all or some of your tax refund. How to Find a Money Transfer Service Near Me? SuperMoney.com is an independent, advertising-supported service. All about the refund | Ask the Experts Live Ev Premier investment & rental property taxes. Let's gather an understanding of what this topic is and what it means for your tax refund. Camilla has a background in journalism and business communications. Tax Topic 151 means that you're getting a tax offset, which is where the Department of Treasury will be taking your refund to pay for something you owe. Compare Business Checking Accounts Reviews. For more information, please read our privacy policy. Before taking any action, you should always seek the assistance of a professional who knows your particular situation for advice on taxes, your investments, the law, or any other business and professional matters that affect you and/or your business. The instructions for how to file a small case request should be included in the letter the IRS sent you, but essentially youll just have to fill out Form 12203 (Request for Appeals Review) and outline what you disagree with and why. Tax Topic 151 means your return is under review. If an employer doesnt file a W-2 properly, your return could be held for review to ensure the correct amount was withheld. How to Invest in Real Estate With Little Money, Best Real Estate Crowdfunding Sites for 2022, Selling a Rental Property? Sad thing about it is that I had insurance from both of my employers the entire year and they still haven't sent my letter on what else they could possibly need. Personal Loan Vs. Line Of Credit: Which Is Better? When it comes to appealing a tax topic 151 classification, you have two primary options: Appealing directly to the IRS via The Independent Office of Appeals and setting up a conference to address the dispute; or, alternatively, you can file a case in court. The IRS code 1242 is used to demarcate the status of your tax refund and that your electronic tax return was received and has been selected for review. The Tax Topic 151 Letters notify you that your tax return is in review, and you have a tax refund offset. Because of this, you will probably only want to file an appeal through the courts as a last resort. Free Military tax filing discount. In addition to examination adjustments, many other things can be appealed, such as penalties, denial of interest abatement, trust fund recovery penalties, liens, levies, and rejection of offers in compromise. Tax topic 151 means you are getting a tax refund offset. 00:00 - Is Tax Topic 151 a audit?00:38 - What happens when Tax Topic 151 Reference 1242?01:11 - How do you know if IRS is auditing you?01:41 - Does the IRS r. Get started, Find deductions as a 1099 contractor, freelancer, creator, or if you have a side gig The IRS can take any refunds you may be due and use that money to pay off any taxes you may owe. If the taxpayer can quickly resolve the outstanding debt, the notice can be a helpful reminder to do so. You may have to pay for an attorney and, if the court does not rule in your favor, you could face a financial penalty. You have clicked a link to a site outside of the TurboTax Community. Once again, consider seeking expert assistance. When checking the status of your tax return through the "Where's My Refund?" You can also refer to Publication 1660, Collection Appeal RightsPDF. Tax Topic 303 is another reference code you may see when tracking your refund. Related >>>What Happens if You Dont File Taxes on Time? After you file. The only way you can get this money back is to pay your back taxes or appeal their decision in writing within 30 days. If you previously opted to forgo a conference with the Appeals Office, youll typically be given an opportunity to settle your dispute with the IRS with one of these conferences before your trial officially begins. Why might my tax return take longer to process? I received 2 notices for April 4th one saying I am getting audited and a cp12 letter saying they made adjustments and im due more money than before and I have a refund credit to my account for April 15th do I still have to reply to the audit letter if I received the cp12 letter. The correspondence also tells you of your right generally to request a conference with an Appeals or Settlement Officer, as well as how to make your request for a conference. If you see 203 that means that you will be receiving a partial tax return from last year, and if you see tax topic 151 that means that your entire tax return will be taken. You can represent yourself if you wish, or bring along your attorney or certified public accountant. And then one day, instead of a refund, you get a tax code topic 151 notice (otherwise known as IRS code 151) telling you to take action. If you choose to submit a small case request, fill out Form 12203, and outline your disagreements. Investor Junkie is your shortcut to financial freedom. You can trust the integrity of our balanced, independent financial advice. All products are presented without warranty. Did you claim any tax credits - stimulus, EITC, etc? I got the same and the IRS lady said I would get a partial refund but letter for rest. This will consist of the IRS conducting a thorough investigation of all elements of your tax return. According to the IRS, 9 out of 10 tax refunds are processed in their normal time frame of fewer than 21 days. What are My Tax Topic 151 Appeal Options? Reference 1242 means your refund is frozen and the IRS needs more information from you. You can file an official IRS tax form called Form 1040X (for e-filed returns) or Form 4506(SP), Request for Innocent Spouse Relief. Compare Home Equity Lines of Credit Reviews. I have a freeze and waiting for letter(s). You can either file your appeal within the IRS or in the courts. Keep in mind this tax topic doesn't mean you made a mistake or did anything wrong when filing. Dial 2 to check for child support or business debt. The good news is, if the IRSs action is based on incorrect information, it can be appealed. This notice may be a report, a letter, or both. In the case of a formal written protest, youll have to send it within a given window of time that should be outlined in the IRS letter to you (generally 30 days from the date of the letter). In this case, its best to seek out professional help. I havnt gotten a letter yet. It's also critical that you double-check all of the information on your return to ensure it is correct and complete. , and avoid a tax offset altogether, youll need to pay off all of your debts, along with any interest or penalties you may have accrued. This means the IRS believes that you owe some debt that can legally be paid out of any tax refund you have coming. Do Private Student Loans Have a Statute of Limitations? How To Get a Personal Loan With Fair Credit, How to Use a Personal Loan to Build Credit. Here are a few of the most common: Up till now, this article has simplified the picture of a tax topic 151 notice or letter. It can be alarming, as the notice often says to take action immediately. Visit Appeals to find information about alternative dispute resolution processes, technical guidance, international programs, and more. It depends on what your strategy is to resolve tax topic 151. Your best bet is to wait until the IRS contacts you via letter, which can take a few weeks. Helping make finance easy. You have the right to receive a written response regarding the Office of Appeals decision and can usually take your case to court. Avoid These Costly Mistakes, Compare Specialty Homeowners Insurance Reviews, Expert Strategies to Invest in Real Estate, How To Start Investing with $1,000 or Less, Investment Strategies to Start Building Wealth, Finding the Right Investor for Your Startup, Strategies On Increasing Your Current Income, How To Manage Your Personal Finances Successfully, Retirement Savings: Making Up for Lost Time. WMR tool says I need to "TAKE ACTION," with a link to Tax Topic 151 info, and IRS phone number and saying to mention "reference number 1242." 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