IRS Code 971 on Your Transcript: What It Means and What to Do Next
Quick answer: Code 971 on an IRS transcript is a “miscellaneous transaction” code. It means the IRS recorded an action on your account, and most often that action is sending you a notice or letter. Code 971 is not good or bad by itself. The short description printed next to it, the date, and the codes around it tell you what actually happened.
Seeing an unfamiliar code on your transcript, especially while you are waiting on a refund, can be stressful. This guide explains what code 971 means, what each common description next to it means, how it works with codes like 570 and 846, and exactly what to do next.
What Does Code 971 Mean on an IRS Transcript?
Every entry on an IRS account transcript has a three-digit transaction code (TC). TC 971 is a general-purpose code the IRS uses to record many kinds of actions that do not have their own code. Behind the scenes, each 971 carries an “action code” that says what kind of action it was, and on your transcript that shows up as a short description, such as “Notice issued.”
The most important thing to do is read the description next to the 971 and the date. Together they tell you whether the IRS mailed you something, received something from you, or changed the status of your account.
Common Code 971 Descriptions and What They Mean
| Description on your transcript | What it usually means |
|---|---|
| Notice issued | The IRS sent you a notice or letter about that tax year. Look for it in the mail or in your IRS Online Account. |
| Amended tax return or claim forwarded for processing | Your amended return (Form 1040-X) or claim was sent to a unit for manual review. This step can take several months. |
| Collection due process notice of intent to levy issued | The IRS sent a final notice before it can levy your wages, bank account, or other assets. This one needs fast action. |
| Installment agreement established | A payment plan was set up on your account. |
| Offer in compromise pending | The IRS received an Offer in Compromise and is reviewing it. |
You may see other descriptions too. If one is not clear, the notice the IRS sent around the same date will explain it.
What Does $0.00 Next to Code 971 Mean?
Most 971 entries show $0.00. That is normal. Code 971 records an action, not a charge or a payment, so the amount is usually zero. A $0.00 amount does not mean the action is unimportant, though. A “notice of intent to levy” also shows $0.00, and it is one of the most serious notices the IRS sends.
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Code 971 With Other Transcript Codes
Code 971 rarely appears alone. Here is how to read it with the codes it usually travels with:
| Code | Meaning | What it tells you with 971 |
|---|---|---|
| 570 | Additional account action pending | Your refund or account is on hold, and the 971 notice usually explains why. |
| 571 | Resolved additional account action | The hold has been released. |
| 846 | Refund issued | Your refund has been approved and sent. |
| 290 | Additional tax assessed | The IRS changed your tax. See our guide to IRS code 290. |
A common pattern while waiting for a refund is 570, then 971, then 571 and 846: the account was held, the IRS sent a notice, and then the hold was released and the refund issued. If you see 570 and 971 but no 571 yet, the IRS is most likely waiting on information from you, so read the notice and respond.
Code 971 vs. IRS Publication 971
They are unrelated. Transaction code 971 is a line on your transcript. Publication 971 is an IRS guide about innocent spouse relief. If you were searching for help with a joint return and a spouse’s tax debt, that is the publication you want.
What to Do When You See Code 971
- Read the description and date next to the 971 entry.
- Find the notice. Check your mail for a letter dated around the same time. If it has not arrived, log in to your IRS Online Account at IRS.gov, where many notices can be viewed digitally. Mailed notices often show up on the transcript before they reach your mailbox.
- Note the deadline printed on the notice. Many give you 30 or 60 days.
- Respond with exactly what is asked, such as W-2s, 1099s, receipts, or ID verification, and include the notice number. Use a trackable method if you mail it.
- Keep copies of everything you send and check your transcript for a 571 or 846 afterward.
When Code 971 Means You Owe the IRS
Not every 971 is about a refund. If the description mentions a notice of intent to levy, the IRS is close to taking money from your wages, bank account, or other income. You generally have 30 days from that notice to request a Collection Due Process hearing, which can pause the levy while your case is reviewed.
If you owe more than you can pay, you still have options. Payment plans, Currently Not Collectible status, penalty relief, and an Offer in Compromise can all stop or reduce collection. Our guide to the IRS tax forgiveness program explains each one.
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What Happens If You Ignore a Code 971 Notice?
Ignoring the notice usually makes things worse. If you owe, the failure-to-pay penalty adds 0.5% of the unpaid tax for each month, up to 25%, and interest is charged on top at the federal short-term rate plus 3%. If the IRS asked for documents and does not get them, it may adjust your return without your input, reduce or hold your refund, or move a balance into collection.
Frequently Asked Questions
Does code 971 mean I am being audited?
Not by itself. Most 971 entries simply mean a notice was sent. An audit is one possible reason for a notice, but so are math corrections, identity checks, and refund changes. The notice will say which one applies.
How long after code 971 will I get my refund?
There is no fixed timeline. If the IRS needs something from you, the refund usually waits until you respond and the IRS processes it. When you see code 571 and then 846 on your transcript, the hold is released and the refund is on its way.
I see code 971 but never got a letter. What should I do?
Give the mail a week or two, since transcripts often update before the letter arrives. In the meantime, check your IRS Online Account, where many notices can be viewed online. If nothing appears, you can call the number on the IRS website for your notice type.
Is code 971 bad?
Code 971 is neutral. It can mean good news, like a payment plan being set up, or something that needs attention, like a request for documents or a levy notice. Always read the description and the notice.
Get Help If the Notice Is About a Balance Due
If your code 971 is tied to a balance you cannot pay, a levy notice, or several years of unfiled returns, you do not have to handle it alone. Clear Start Tax works with individuals and businesses who owe the IRS or the state, helping them understand their options and respond before collection escalates. Every situation is different, so a free, confidential consultation is the best way to find out where you stand.
