Want to learn the meaning of 971 IRS Code notice on transcript? Here’s what it truly means.
Got the IRS code 971 on your tax transcript, and wondering what it means? You are about to find out. However, let’s touch on a few surrounding facts first, shall we?
The Internal Revenue Service (IRS) is the United States Federal Governments revenue service agency. It is the main statutory tax law body that is responsible for administration of the Internal Revenue Code and collection of taxes.
Its headquarters is located at Internal Revenue Service Building, 1111 Constitution Ave., NW Washington, D.C. The IRS was founded on the 1st day of July 1862. It started with the creation of the office of commissioner for internal revenue, courtesy of the passage of the Revenue act of 1862 during the American Civil War. The goal then was to enact temporary income tax for payment of war expenses.
It was an emergency war time expense tax system that apes the British income taxation system. The tax rate in 1862 is 3% from incomes between $600 to $10,000, while it is 5% for income higher than $10,000. Most of those who were wage earners then were actually exempted by this system, since their earnings don’t meet up with those set figures.
21% of the war revenue were raised from this tax system by the end of the war, while 10% of households have paid one of income tax or the other during the period.
The IRS has been responsible for collection of most of the revenue of the used to fund the Federal Government. It has faced criticisms, oppositions and controversies about its methods, constitutionality and general taxation principles.
You will get to know the meaning of 971 IRS Code Notice On Transcript as you read on.
About IRS Transcripts And How To Access Them
IRS transcripts is something that can actually sound strange the ears of many, as many people do not know about it, talk less of trying to access their own.
Tax transcripts consist of a record of your account activities, income, tax filings, from the Internal Revenue Service. They can be gotten from the IRS by phone, fax, or mail. The transcripts arrive within 10 days after the Internal Revenue Service receives the request.
Apart from the above methods, tax transcripts can be easily accessed online without charge. The Internal Revenue Service created the online access option several years ago. All you need to do is to set up an account on the IRS get transcript tool, and you can access any of the existing tax transcript types.
Is It Possible IRS Has No Record Of My Tax Returns?
Yeah, the chances of this occurring are few, but it can happen. However, it’s not a cause for panic. It can be dealt with. You can discover the IRS has no record of your tax returns even after you have completed it, and this may lead to you receiving the IRS letter 4903.
Reasons for receiving the letter 4903 may be that the IRS did not receive your tax returns from you by the due date, or previous notices were sent to you by the IRS but nonresponse was received.
Your response to this situation is dependent on the method you employed to file the returns in the first place.
If the returns were filed via mail, print other copies and mail it again to the IRS, and if you paid the tax you owed, you can attach a copy of confirmation that the payment has been processed or a copy of the cancelled check.
However, if the returns were filed electronically, (online) there is a chance it was rejected. Correct the rejection issues and file the returns again through the same means.
About IRS Transcripts Codes
If you are not a tax expert and are looking for something to do to disturb your brain and make it spinning, attempting to Decipher IRS document 6209 would be the ideal task. Loaded in there are the thousands of IRS codes in use.
As tax returns are processed, digit long transaction codes (TC) are added to it to indicate changes. The codes are useful in the identification of a transaction being processed or the maintenance of actions history that were posted to a taxpayer’s account on the Master File.
Master File is the electronic system that the IRS uses to check and process tax returns, and it is accessed through Internal Data Retrieval System (IDRS)
Back to the codes matter, there are codes to know and codes to undo an action. Many of the codes may not mean anything consequential, just for indication and tracking of some changes in tax returns from year to year. However, some codes may be of great significance, indicating situations like; tax return adjustment, an examination in progress, and so on.
As hinted earlier in this piece, unless you are a tax professional, explanation of the codes can be brain spinning. Therefore the service of a tax professional may be needed in breaking it down for your understanding. And we are here now in this piece to break down the meaning of one of them for you right now. The IRS code 971.
What Is The Meaning Of IRS Code 971?
IRS code 971 is a code that is capable of lots of meanings for IRS transactions. The meaning actually on the official website in the pocket guide definition was “Miscellaneous Transactions” but the understanding of this term is not as easy as pronounced.
So what are the reason why you may have IRS code 971 on your transcript? See them here;
- Bankruptcy discharge
- Equitable relief or liability separation
- Tax relief from innocent spouse
- Letters have been sent for stimulus payment.
These are the possible reasons you may get code 971 TC on your transcript.
According to the IRS website; “Publication 971 explains when a spouse may be relieved of tax, interest, and penalties on a joint tax return.”
Is IRS Code 971 Bad News?
No, IRS code 971 is not an indication of any negative reason in the background. It may just be an indication that your tax returns may actually take more time to be processed.
So, in light of this, should you be worried about code 971? Not at all. Nothing worth fussing. It’s a game of time.
Final Words On 971 IRS Code Notice On Transcript
This is all about explanation of IRS code 971. Hope you understand it perfectly now. How about letting others know it too. All you got to do is share this piece!