Common Refund Holds, Why They Happen, and How to Release Them

Overview

A tax refund hold is a temporary pause the IRS places on a refund to verify identity, income, or claimed credits. These holds exist to prevent fraud and ensure taxpayers receive correct refunds. While a hold can be stressful, most are routine and resolvable with documentation and timely response. In my practice I’ve seen holds resolved in anywhere from a few weeks to several months depending on how quickly taxpayers respond and the nature of the issue.

Why does the IRS place refund holds?

The IRS places holds for three broad reasons:

• Identity verification and suspected identity theft. If the IRS detects signs that a return may not belong to the filer, it will pause the refund to confirm identity (IRS guidance on identity theft and tax-related identity theft: https://www.irs.gov/identity-theft-fraud-scams/identity-theft-and-tax-related-identity-theft).
• Verification of income or withholding. A mismatch between income reported on a return and what employers, banks, or other payers reported to the IRS will trigger a review.
• Extra scrutiny for refundable credits. Refundable credits such as the Earned Income Tax Credit (EITC) and Additional Child Tax Credit (ACTC) are frequent triggers because of historical fraud and error. Under the PATH Act, the IRS may delay refunds that include EITC/ACTC claims until mid-February to allow for additional checks (see IRS EITC information: https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit-eitc).

Common types of refund holds and typical timelines

Timelines below reflect common IRS processing patterns in recent years; specific timing can vary by case and tax season workload.

• Identity verification hold: 4–12 weeks. The IRS will mail a notice (often a CP01A or similar) asking you to verify identity or provide documents. Respond promptly.
• Income mismatch (W-2/1099 differences): 4–8 weeks. IRS compares your return to information returns filed by employers and payers; they will request corrections or documentation if there’s a mismatch.
• EITC/ACTC review (PATH Act delay plus review): 6–12 weeks. Refunds claiming these credits are subject to a legislated delay and may receive additional verification requests.
• Suspected fraud or return review: 8–24 weeks. Suspicious returns that show patterns consistent with fraud require deeper review.
• Offset or levy holds (debts, child support): Variable. If your refund is reduced or held because of past-due federal or state debts, the IRS will send a notice explaining the offset (see IRS topic on refund offsets: https://www.irs.gov/individuals/irs-topic-203-refund-offsets).

How it works — the IRS process in plain language

1. You file your return electronically or on paper. The IRS cross-checks the return with information returns (W-2s, 1099s) and internal fraud detection systems.
2. If flags appear (mismatched SSN, duplicate dependents, unusual credit claims), the system or an agent places a refund hold.
3. The IRS mails a notice explaining the reason for the hold and what documentation is needed. Electronic filers may also see status messages on the IRS “Where’s My Refund?” tool (https://www.irs.gov/refunds).
4. You submit the requested documents or correct the return. The IRS reprocesses the return and, if satisfied, releases the refund.

Real-world examples (what I’ve seen in practice)

• A taxpayer filed electronically but omitted a second part-time job’s W-2. The IRS flagged a wage mismatch and mailed a notice. After the taxpayer supplied the missing W-2, the hold was lifted in five weeks.
• A single parent claimed the EITC and ACTC. Because the dependent’s claim overlapped with another return filed by an ex-spouse, the IRS requested proof of custody and the child’s residency. The taxpayer provided school records and a custody agreement; the refund was released after eight weeks.
• Identity theft case: A taxpayer’s refund was rejected because another return had already been filed using their SSN. The IRS required an Identity Protection PIN (IP PIN) application and submission of Form 14039 (Identity Theft Affidavit) to resolve the issue (IRS identity-theft guidance).

What the IRS will (and will not) tell you

• The IRS must send a written notice explaining a hold. Expect a letter in the mail; the IRS rarely gives detailed reasons by phone.
• You will not get your refund until the IRS has verified the issue or corrected the return. If the hold was for an offset due to debt, the notice will explain the offset amount and creditor.

Step-by-step checklist to release a refund hold

1. Read any IRS letter carefully; note the deadline and requested documents.
2. If the IRS asks for corrected information, file an amended return or call the number on the letter for instructions.
3. Provide clear, legible copies of documents: W-2s/1099s, birth certificates, custody orders, school or medical records for dependents, and proof of address.
4. Send documents exactly as the IRS instructs — mail to the address on the notice or follow secure upload instructions if available.
5. Keep copies of everything you send and track mailing with proof of delivery.
6. Use the IRS “Where’s My Refund?” tool to monitor status and allow the IRS time to process submitted documents (https://www.irs.gov/refunds). For more on tracking, see our guide on how to track your tax refund.

Documentation that resolves the most common holds

• Identity verification: government-issued photo ID, Social Security card, signed identity affidavit (Form 14039 if identity theft).
• Income mismatches: employer W-2, corrected 1099, pay stubs that show year-to-date wages, or a statement from the payer.
• Dependent verification: birth certificate, school records, medical bills, custody or divorce decree.

When to contact the IRS and what to expect

• Call the IRS only after you’ve received their notice and allowed the specified processing time to pass. Use the phone number on the notice or the general IRS assistance line. Expect long wait times during tax season.
• If you suspect identity theft, follow the IRS’s identity-theft process and consider filing a police report where appropriate.
• If a refund was reduced for a federal or state offset, review notices and contact the agency that received the offseted funds (e.g., state child support agency) if you believe it’s in error.

Common mistakes and how to avoid them

• Mistake: Ignoring an IRS letter. Fix: Always respond promptly and keep records.
• Mistake: Mailing poor-quality or incomplete documents. Fix: Provide clear, complete documentation and include a cover letter summarizing what you sent.
• Mistake: Calling repeatedly for updates. Fix: Use the online tools and wait the stated processing time; calling too early often wastes time.

Additional resources & interlinks

• Use the IRS “Where’s My Refund?” tool to check status: https://www.irs.gov/refunds
• If you want more detail on why refunds are delayed generally, see our article: Why Your Tax Refund Might Be Delayed.
• If you suspect fraud or identity theft, our guide on Handling Identity Theft-Related Tax Returns explains recovery steps and documentation.

Professional tips

• Prepare and retain documentation all year: W-2s, 1099s, receipts for childcare, custody documents, and proof of residency make any hold easier to resolve.
• When claiming EITC or ACTC, double-check dependent SSNs and residency periods before filing.
• Consider filing early but only after you have all forms; early honest mistakes often trigger holds that could have been avoided.

Final notes and disclaimer

Refund holds are rarely permanent and are usually resolved when taxpayers supply the requested information. This article is educational and not a substitute for personalized tax advice. For specific cases—especially suspected identity theft, offset disputes, or complicated credit claims—consult a qualified tax professional or contact the IRS directly.

Authoritative sources

• IRS — Where’s My Refund?: https://www.irs.gov/refunds
• IRS — Earned Income Tax Credit (EITC): https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit-eitc
• IRS — Identity Theft and Tax-Related Identity Theft: https://www.irs.gov/identity-theft-fraud-scams/identity-theft-and-tax-related-identity-theft
• IRS — Refund Offsets (Tax Topic No. 203): https://www.irs.gov/individuals/irs-topic-203-refund-offsets

(For additional reading on tracking refunds and common delays, see our related glossary posts linked above.)