Receiving an IRS Letter LTR 4464C can be unsettling for taxpayers, as it signals the IRS is reviewing your tax return. This notification means the agency needs additional time to verify certain information before processing your return.
Reasons the IRS Sends This Letter
The IRS issues Letter LTR 4464C when a return is placed on a “Questionable Refund Hold” by Return Integrity Verification Operations (RIVO), indicating your refund is being held while the IRS completes its review. 1Internal Revenue Service. 21.5.6 Freeze Codes
Discrepancies between your tax return and third-party data, like W-2s or 1099s, can also trigger a review. The IRS uses automated systems to cross-check reported information, and mismatches, such as unreported income or incorrect Social Security numbers, may result in further scrutiny.
Claims for certain credits or deductions, such as the Earned Income Tax Credit (EITC) or Child Tax Credit (CTC), may also require additional verification. Taxpayers claiming these credits may need to provide documentation to confirm eligibility.
Required Documents and Information
Receiving Letter LTR 4464C means you’ll need to gather documentation to address the IRS’s concerns. The necessary documents depend on the specific issues under review. For income verification, W-2s or 1099s are critical to substantiate reported figures.
For deductions or credits, supporting documents are essential. For example, Form 1098 may be required for mortgage interest deductions, and charitable contributions need to be backed by receipts or acknowledgment letters. Credits like the EITC might require proof of residency and relationship for a qualifying child.
In some instances, the IRS may request identity verification, such as a Social Security card or government-issued ID. Carefully review the letter to determine the exact documents needed for your situation.
Potential Effect on Processing Your Return
Letter LTR 4464C can delay your tax return’s processing. The review halts the normal processing timeline, often extending it beyond the typical 21 days for electronically filed returns. 2Internal Revenue Service. Tax Time Guide: Use Where’s My Refund? Tool To Track Refund Status
This can impact financial planning, particularly for taxpayers relying on a timely refund. If you owe taxes, the review could also affect payment schedules. Promptly addressing the IRS’s requests and providing accurate documentation can help reduce delays and minimize potential penalties or interest.
Recommended Actions
Upon receiving Letter LTR 4464C, carefully read the letter to understand the IRS’s specific concerns. This will guide you in determining the documentation required. IRS Publication 556 offers helpful insights into the examination process and your rights as a taxpayer.
Consider consulting a tax professional, such as a certified public accountant (CPA) or enrolled agent, especially if the issues are complex. These professionals can help you prepare a complete and accurate response, ensuring compliance with tax laws and addressing any discrepancies.
Possible Outcomes
The IRS review initiated by Letter LTR 4464C can result in several outcomes. One possibility is that no issues are found, and your return is processed as originally filed, with any refund issued promptly.
If discrepancies are identified, the IRS may propose adjustments to your return, such as changes to reported income, deductions, or credits. Taxpayers have the right to contest these adjustments by providing additional documentation or requesting a formal review. If the IRS determines an underpayment of taxes, an accuracy-related penalty of 20% may be imposed under Internal Revenue Code Section 6662. 3U.S. House of Representatives. 26 U.S.C. § 6662 – Accuracy-Related Penalty on Underpayments