If your IRS account transcript shows Transaction Code 971 next to a CP05 notice, the IRS has mailed you a letter telling you your refund is on hold while it verifies information on your return. It is not an audit. For a standard CP05, the agency asks you to do nothing and wait up to 60 days while it finishes the review.1Internal Revenue Service. Understanding Your CP05 Notice
What the Code and the Notice Mean Together
Transaction Code 971 is an internal marker showing that the IRS generated and mailed a notice or letter to your address of record.2Internal Revenue Service. Internal Revenue Service Section 8C Master File Codes The code alone doesn’t tell you what the letter says. When it is paired with a CP05, the letter is telling you the IRS is holding your refund to verify one or more items on your return: income, income tax withholding, tax credits, or business income.3Internal Revenue Service. CP05 Notice
A CP05 review is a verification check against records the IRS already has. The agency cross-references specific line items on your return against wage statements from employers, income reports from banks, and similar third-party data. It is not questioning your entire return, and it is not accusing you of fraud. Most returns that hit this filter turn out to be accurate.
The 570 and 971 Sequence on Your Transcript
On the account transcript you’ll often see Transaction Code 570 posted before Code 971. Code 570 is the actual freeze on any outgoing refund payment. Code 971 is the letter the IRS sent to explain that freeze. Seeing both codes is the normal pairing, not a sign your situation is worse.4Internal Revenue Service. Get Your Tax Records and Transcripts
When the review finishes and the hold clears, Transaction Code 846 posts to your transcript with a date. That date is when the IRS authorized the refund. Direct deposit follows within a few days; a mailed check takes longer.
Why Your Return Got Flagged
The IRS runs every return through automated filters before releasing a refund. Those filters compare what you reported against what employers, banks, and other payers already submitted on Forms W-2 and 1099.5Internal Revenue Service. Internal Revenue Manual 4.1.27 Document Matching, Analysis and Case Selection A mismatch, even a small one, can trigger the hold. So can a late-filing employer: if the IRS doesn’t yet have the wage report to match against, it pauses the refund until the record arrives.
Returns claiming the Earned Income Tax Credit or the Additional Child Tax Credit get extra attention. Under the PATH Act, the IRS cannot release any refund on a return claiming either credit before mid-February, including the portion of the refund that has nothing to do with those credits.6Taxpayer Advocate Service. Claiming the Earned Income Tax Credit If a CP05 review lands on top of that statutory delay, the combined wait can stretch well past what any refund estimator predicted.7Internal Revenue Service. When to Expect Your Refund if You Claimed the Earned Income Tax Credit or Additional Child Tax Credit
Identity Theft Screening
The IRS also runs filters aimed at returns filed by identity thieves.8Treasury Inspector General for Tax Administration. The IRS Continues to Improve the Detection and Prevention of Individual Identity Theft Sometimes those flags resolve internally without any contact. Sometimes they generate a CP05 or a separate identity verification letter.
If you received a CP05 for a return you never filed, someone may have used your Social Security number. Complete Form 14039 (Identity Theft Affidavit) and send it to the address on the notice.9Internal Revenue Service. When to File an Identity Theft Affidavit If instead you received Letter 5071C, 4883C, or 5747C, follow the instructions in that specific letter rather than filing Form 14039. Those letters have their own verification path.
Do You Need to Do Anything?
For a standard CP05, no. The IRS instructs you not to call until at least 60 days after the notice date, and only then if the refund still hasn’t arrived and you haven’t heard anything further.1Internal Revenue Service. Understanding Your CP05 Notice Calling earlier doesn’t move the queue.
Two follow-up variants are different. If you received a CP05A or CP05B instead of (or after) a plain CP05, the IRS is asking you for documents, and a timely response matters.
- CP05A asks for proof of your income and withholding. Send copies of at least three pay stubs including your year-end stub. The IRS specifically says not to send your W-2. A letter on company letterhead from your employer or a statement of retirement benefits also qualifies. Include a copy of the notice with your response.10Internal Revenue Service. Understanding Your CP05A Notice
- CP05B means income you reported doesn’t match third-party records (W-2s, 1099s, or W-2Gs). Gather documentation that supports the income figures on your return. If your documents don’t support the return, or you don’t respond, the IRS will adjust or deny the refund.11Internal Revenue Service. Understanding Your CP05B Notice
Check the letter number in the upper right corner of the first page so you know which one you have. To send documents, three options work: the IRS Document Upload Tool at irs.gov, which is fastest and gives an immediate confirmation;12Internal Revenue Service. IRS Document Upload Tool the fax number printed on your notice, keeping the transmission page; or certified mail to the address on the notice, with copies of everything kept on your end. Include a copy of the notice itself either way.
Tracking the Refund While You Wait
The Where’s My Refund? tool on irs.gov (or the IRS2Go app) shows whether the return has been received, approved, or sent, using your Social Security number, filing status, and exact refund amount.13Internal Revenue Service. Refunds During a CP05 hold, it usually just says the return is still being processed.
The account transcript, available through your IRS online account, shows more. Every transaction code that has posted appears there, including the 570 hold, the 971 notice, and eventually the 846 refund-issued code with a payment date.4Internal Revenue Service. Get Your Tax Records and Transcripts Once 846 shows a date, the refund is on its way.
How Long the Review Takes
The IRS says up to 60 days from the date on the notice.3Internal Revenue Service. CP05 Notice Some reviews finish sooner. Some run longer. If the IRS decides it needs more information or more time, it sends a follow-up notice (a CP05A or CP05B, for instance), which starts a fresh waiting period. Returns with multiple income sources or larger credit claims can go through several rounds.
If 60 days have passed with no resolution and no follow-up notice, call the number on your CP05 (800-829-1040). A representative can tell you whether the IRS is waiting on information from you or whether your case is still in the review queue.
When the Taxpayer Advocate Service Can Step In
The Taxpayer Advocate Service is an independent organization inside the IRS. You qualify for TAS help if your issue has gone unresolved more than 30 days past normal processing time, or if the delay is causing financial hardship such as inability to pay for housing, food, utilities, or transportation.14Taxpayer Advocate Service. Can TAS Help Me With My Tax Issue TAS also handles cases where the IRS keeps sending “we need more time” letters without actually moving the case.
To request help, submit Form 911 to your local TAS office, explaining the issue and how it’s affecting you.15Taxpayer Advocate Service. Submit a Request for Assistance
Interest the IRS Owes You If the Refund Runs Late
If your refund is delayed past 45 days from the later of your filing deadline or the date you actually filed, the IRS must pay you interest on the overpayment.16Office of the Law Revision Counsel. United States Code Title 26 Section 6611 – Interest on Overpayments Refunds issued inside that 45-day window carry no interest. After that, interest runs from the filing deadline until the refund is paid.17Internal Revenue Service. Internal Revenue Manual 20.2.4 Overpayment Interest
For the third quarter of 2026, the rate is 7%, compounded daily. You don’t need to request it; the IRS adds it automatically when it issues the late refund. The interest is taxable income in the year you receive it.
If the Review Turns Up Errors
When the numbers check out, the IRS releases the refund and the case closes. When they don’t, the IRS adjusts the return, which usually means a smaller refund or a balance due, and sends a separate notice explaining what changed.
If you spot an error on your own return while the review is running, you can file Form 1040-X to amend it. The IRS doesn’t prohibit amending during a review, but it adds complexity because the agency is now handling both. File only the 1040-X, not a second original return.18Internal Revenue Service. Instructions for Form 1040-X Amended returns generally take 8 to 12 weeks to process, though some take up to 16.19Internal Revenue Service. When and How to Amend a Tax Return
One practical note if you’ve moved since filing: update your address with the IRS right away. A CP05A or CP05B sent to an old address that you never see can end with the IRS making a final determination on the refund without your input.