The initial tax topic 151 letter is a notification that your tax return is under review. Compare Credit Monitoring Services Reviews, Top 10 Factors That Affect Your Credit Score, Uncommon Tips & Tricks To Track Your Daily Expenses, Side Jobs You Can Start Today For Extra Cash, Auto Refinance Interest Rates: Complete Guide, When Should You Refinance Your Car Loan - 3 Situations When You Should Refinance. File faster and easier with the free TurboTaxapp. How Much is the Tax on a Vehicle in Georgia. It also lets you know that you can appeal the decision if it is based on incorrect information. If this happens, dont panic. Yes I have the same and 2 971 notices on my transcript along with a refund freeze. If an employer doesnt file a W-2 properly, your return could be held for review to ensure the correct amount was withheld. Federal administrative agencies, of which there are many: As a practical matter, and in the interest of your long-term financial wellbeing, you should familiarize yourself with this current form of the U.S. government. Youre able to appeal the majority of IRS decisions at your local Appeals office. tool on the IRS website, you may see a message that says "Refer to Tax Topic 152." What if, instead, you get a letter explaining that your tax refund is being reduced? They IRS may have made adjustments because you might of owed more taxes or a penalty for health insurance. Why Should You Get a Business Credit Card? Opinions are the author's alone, and this content has not been provided by, reviewed, approved or endorsed by any advertiser. In this case, you'll want to know why you're seeing this code and what you should do about it. In the appeal application, you should write facts and figures to support your stance and fight back. Dial one to check for taxes. Whichever way you choose, get your maximum refund guaranteed. Keep in mind that small case requests can only be done if the total amount for the tax period is no more than $25,000. To validate this you may be asked to provide a proof of payment from your employer, such as a pay stub or a canceled check. Spoke to rep and said i have to wait for letter in the mail. Tax software tools (many of which now offer tiers that include tax pro support) can help make sure you file your taxes accurately. I have tax topic 151 with a take action and reference number 1242. As well, the likelihood that a court will assess the evidence differently than the IRS may not be high, since courts often defer to the judgment of agencies like the IRS, at least in the opinion of some. Hand off your taxes, get expert help, or do it yourself. Get unlimited advice, an expert final review and your maximum refund, guaranteed with Live Assisted Basic. If you have any outstanding debts with a federal agency like the IRS, this can decrease your refund amount. Should You Use Your Tax Refund to Pay Off Debt? Reference Code Number 1121 and 1242 - Return Under review TurboTax Live tax expert products. notice of deficiency has been mailed. Getting a Business Loan When You Have Bad Credit. File an Appeal Within the IRS My advise is for everyone who is waiting to go over their returns if it shows up on your tax transcript. It is a good idea to pay your debts. IRS Topic 151, which stands for "Offset of Your Refund," refers to the offset or reduction of your federal tax refund based on the money you owe to a federal agency. Self-employed taxes. In fact, you will normally receive a couple of them. You can appeal the IRSs decision through the IRS or through the courts. If you have outstanding student or child support loans, the IRS will use your refund to pay off those debts. Get started. But knowing you can appeal if theres an error is good news. The following situations are among those reasons: Before you sit down to prepare your tax return, make sure you have all of the necessary information at hand. Investor Junkie does attempt to take a reasonable and good faith approach to maintaining objectivity towards providing referrals that are in the best interest of readers. She is a digital nomad currently based in Asheville, NC, and shares about her life on the road over on Substack. This can be done for various credit claims such as Earned Income Credit or any of the education tax breaks (this is not all inclusive). Was told by irs I need to wait till the 29th to receive my letter, we are in the exact same boat. The code 1242 means, you need to supply IRS some more additional information such as a birth certificate showing for your child, etc. Common errors that trigger the Tax Topic 303 message and further IRS review of your return include: The bottom line is that if you receive a message indicating you should reference Tax Topic 152, there is no need to panic. If the taxpayer can quickly resolve the outstanding debt, the notice can be a helpful reminder to do so. I don't know why either they never really said, so we're just waiting for that letter. If you are going to pay the debt or appeal the tax offset then there are different procedures that have to take place. is the most straightforward way to address your tax topic 151 classification. Filing through the courts can be a costly decision. The IRS will send you a letter writing the reasons your refund was reduced, including any additional information about how to resolve the situation. The IRS Tax Topic 151 can be good or bad depending on the taxpayers situation. SuperMoney strives to provide a wide array of offers for our users, but our offers do not represent all financial services companies or products. The IRS will hold your refund until you confirm the information requested in the CP05 Notice. Working from home? After getting the initial letter, wait for a second one. Aim to answer the IRSs request within 30 days. However, if you disagree with the tax topic 151 classification, the easiest and most cost-effective way to appeal the decision is to take it up with the IRS directly. How Do I Know My Tax Return Is Under Review? By accepting all cookies, you agree to our use of cookies to deliver and maintain our services and site, improve the quality of Reddit, personalize Reddit content and advertising, and measure the effectiveness of advertising. For simple tax returns only In the case that they are continuing to pursue the tax topic 151 classification, the letter should lay out why youve received the tax topic 151 classification, the action the IRS plans to take or has already taken, and the options at your disposal. ago If this letter doesnt satisfy you, you can either contact the Bureau of Fiscal Service for more information, or else take action on the letter yourself. Level 15. What does IRS tax topic 151 means? Instead, that money is being used to pay off something you owe. What do tax topic 151 and reference 1242 mean? Youre able to file a case in this court only after the IRS issues you an official letter stating the amounts it believes you owe, called a notice of deficiency. If the debt is large or the situation complex, seeking professional advice and enlisting the help of a tax professional will be essential. Your best bet is to wait until the IRS contacts you via letter, which can take a few weeks. Topic 152 is a generic reference code that some taxpayers may see when accessing the IRS refund status tool. How To Get a Personal Loan With Fair Credit, How to Use a Personal Loan to Build Credit. Reference 1242 means your refund is frozen and the IRS needs more information from you. This topic describes how the IRS will use your tax refund to pay off outstanding debts that you owe to other federal agencies, such as unpaid student loans. Here's what it means if you receive a message about Tax Topic 152. Must be one of the glitches that they are talking about. Keep in mind this tax topic doesn't mean you made a mistake or did anything wrong when filing. Ask questions and learn more about your taxes and finances. We endeavor to ensure that the information on this site is current and accurate but you should confirm any information with the product or service provider and read the information they can provide. I just checked mine and have the same message. Most Common Mistakes When Filing Your Taxes, Best Tax Relief Companies with a Money-Back Guarantee, Best Tax Relief Companies with Lowest Fees, Best Tax Relief Companies with Tax Attorneys On Staff, Getting Out of Tax Debt: Strategies and Solutions, Reasons for receiving a tax refund offset. Press J to jump to the feed. The IRS works with taxpayers to try to settle tax disputes in an effort to avoid court proceedings through an administrative appeals process. We'll help you get started or pick up where you left off. The IRS organizes certain especially important or frequently needed taxpayer information into a list of tax topics. Members should be aware that investment markets have inherent risks, and past performance does not assure future results. Your return will remain frozen in the IRSs system until the review process is complete. How Do I Respond to an IRS Reference Number 1242? If you decide to request an appeals conference, youll be expected to bring the proper records and documentation with you in order to support your position. I just called the number and input all my info and it says that I don't have any debts. However, if you choose a product and continue your application at a lending partners' website, they will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit. The first Tax Topic 151 letter you will receive is simply a courtesy notification. I havnt gotten a letter yet. Is Refinancing Your Student Loan Worth It? Does Refinancing Your Car Loan Hurt Your Credit Score? 0. Security Certification of the TurboTax Online application has been performed by C-Level Security. While it should be taken seriously, tax topic 151 is not something you necessarily need to worry about. For example, says Allec, you may want to enlist help if youre trying to deduct a credit that youre not sure youre qualified for or if You were overly aggressive in taking business deductions on your Schedule C, he adds. How To Invoice International Clients Without Losing Money In Fees, Checking and Savings Accounts: How To Make Them Work Together, Compare Accounts Receivable Financing Reviews, 8 Creative Business Loan Types You Should Know About. You have clicked a link to a site outside of the TurboTax Community. If you dont want to pay the taxes, there is a process to appeal their decision. You can mail or fax the information back to the IRS following the guidance provided in your CP05 letter. We also got the 1242 status code, we received a letter telling us to send in more proof of head of household, birth certificates for the kids, etc. If you pay an IRS or state penalty (or interest) because of an error that a TurboTax tax expert or CPA made while acting as a signed preparer for your return, we'll pay you the penalty and interest. You can pay off the debt using a credit card, bank account at a financial institution, direct deposit, or debit card (or by writing a paper check) to get rid of it quickly. Investor Junkie strives to keep its information accurate and up to date. I received a code 1242, and now when inquire about my taxes on Where's my refund? Or you can get your taxes done right, with experts by your side with TurboTax Live Assisted. Filing an appeal directly with the IRS is the most straightforward way to address your tax topic 151 classification. You can file an official IRS tax form called Form 1040X (for e-filed returns) or Form 4506(SP), Request for Innocent Spouse Relief. We received back a tiny amount of money so we called to see why and was told to just wait for another letter in the mail. Jacksonville, FL 32256, Phone: (800) 444-0622 Topic 152 is a generic reference code that some taxpayers may see when accessing the IRS refund status tool. This editorial content is not provided by any financial institution. Taking your tax-debt mountain (by strategy), reviews and comparisons of the best tax relief companies with tax attorneys on staff. It's also critical that you double-check all of the information on your return to ensure it is correct and complete. Otherwise, you dont know when the tax topic 151 letters will be delivered to your house just like the owls delivering letters to the Dursley home in Harry Potter. Understanding the Two IRS Letters. File your own taxes with confidence using TurboTax. Take Action with Tax Topic 151 and ref #1242 means to look for a letter from them in the mail to verify info within 30 days of filing. So, if you have unpaid taxes, this is something to be aware of. If you do consider it bad news, keep in mind that interactions with tax authorities can get much worse, such as in cases of tax fraud. Usually means an offset usually either child support or back taxes. 2022 tax refund update - where's my refund tax topic 152 *How to Contact the IRS* W4. Reddit and its partners use cookies and similar technologies to provide you with a better experience. According to the IRS, 9 out of 10 tax refunds are processed in their normal time frame of fewer than 21 days. For some reason it only lists 3 of my dependents, when there should be 5. Consent is not required as a condition of purchase. 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