Please read through this guide if you want to learn how to interpret the IRS Code 424 on your tax transcript.
IRS tax 424 means that your tax return has been set aside for examination.
After an examination is done, if the IRS is not satisfied with the results, they will authorize an audit on your returns.
Why IRS Code 424
It may seem scary to most people when they get an IRS audit notice.
You shouldn’t freak out when you see this code, as the IRS bases audit on random selections related to various audit red flags.
You may be audited if your return is linked or related to another taxpayer or business entity facing an audit.
People mistakenly submit incorrect information given the new and different paid tax credits, such as:
- The RRC (stimulus checks)
- Earned Income Tax Credit (EITC)
- Advance Child Tax Credit (CTC)
Minor filing discrepancies will be flagged during return processing, and if the amounts claimed are above IRS statistical norms, they may systematically get flagged for further examination.
If further reviews of TC 423 cannot establish the eligibility for you or your claimed dependents, your return may be flagged for a formal audit. (TC 420)
This is what the code 424 means on your tax transcript in the US.
What Happen After IRS Code 424
Once your return is selected for audit, it will be sent to the IRS review/appeals department, and an auditor will manually review the return and supporting documents.
There are different levels of audit where further review is done.
This will delay getting your return and refund processed.
This happens after IRS Code 424 appears on your tax transcript in the US.
What Should I Do When IRS Code 424 Appears
There is absolutely nothing you can do about this code.
You have to be patient with the IRS to carry out the examination, and if need be, auditing will be done.
You don’t have to worry about anything if you enter the right information.
This is all you need to know about IRS Code 424 in the US.
This simple and easy article Was Last Updated on by Nana Abrokwa
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