When you see IRS Code 971 with a future date, it means that your tax refund will be held until at least the specified date.
Understanding IRS Code 971 Refund Delays
IRS code 971 represents a refund delay code, which means that the IRS will withhold your tax refund until they verify some information on your tax return.
When you access your tax transcript and notice code 971 or other codes, you’re viewing the same data that the IRS’s outdated computer system sees. Delay codes instruct the system not to release your tax refund immediately.
Many delays are automatic. For instance, when you claim a refundable tax credit, there may be an extra hold on your refund, especially if you file early. This is because numerous individuals commit tax fraud through refundable credits, prompting the IRS to wait until they receive your tax forms from your employer and other sources.
Some delays occur as the IRS reviews each tax return when they arrive. If the computer system identifies a potential mistake or inaccurate claim, it will delay the tax refund until an IRS agent can review your tax return.
When you encounter a delay, you might receive the refund you claimed, or you may receive communication from the IRS. The delay simply indicates that you are in the automatic waiting period or that they are still reviewing something.
Therefore, when you see IRS code 971 with a future date, it means that the IRS is delaying your refund until at least that date. At that point, you may receive your refund, or you can review your tax transcript again to see if the IRS has extended the delay.
What to Do
Since a refund delay code merely indicates that the IRS is reviewing your tax return, there’s not much you can do at this stage. Some individuals opt to call the IRS, but this won’t expedite the process, and you’ll only stress yourself out waiting on hold for hours.
It’s not worth reaching out to the IRS until you receive a letter or several weeks have passed without any status updates in your account.
A common error people make is changing their bank account before their refunds arrive. You cannot modify your tax refund direct deposit details after submitting your tax return.
If you close your bank account, the IRS will send your refund to your former bank. This will cause your refund to be returned to the IRS, and it will take a few more weeks for them to send you a check.
If you happen to move while awaiting your tax refund, remember to update your address with the Post Office and on the IRS website.
Assistance for IRS Refund Delays
There isn’t a specific place to seek help with an IRS refund delay. The delay simply indicates that you’re in the queue.
If and when the IRS informs you that they’re modifying your refund, consult a tax professional if you don’t comprehend the changes or disagree with them.
One additional step you can take if your refund is significantly delayed (i.e., waiting for months without any updates from the IRS) is to contact your local Congressman’s office. Congressional staff members can assist you in contacting the IRS or other government agencies to help expedite the process.