In today’s guide, we will explain what IRS tax topic 151 means in your letter. For those who received this tax code or topic in your 2023 or 2024 transcript, we have taken our time to explain everything in detail for you to understand.
In most cases, people panic when they see the IRS tax transaction code 151 on their transcript, especially for the years 2023 and even that of 2024.
This should not be the case.
For the past weeks, We get numerous messages with questions like “Should I Worry About Topic 151“, “What Does IRS Topic 151 Mean“, “Is Tax Topic 151 Bad“, “What Does IRS Code 151 Take Action Mean“, “tax topic 151 your appeal rights” and similar questions.
We can say that you should not worry at all if you have code 151 on your transcript.
It is nothing to worry about.
The code or tax topic indeed indicates that you should take action, but that should not be a bother.
After we have taken our time to explain this code in detail, you will agree with me that there is actually no cause to worry.
Recommended guide: Meaning Of Code 846.
Table of Contents
What Does IRS Tax Topic 151 Mean?
That tax topic code 151 actually means your tax refund will be offset if you owe any money to the agency (IRS).
In that case, if you owe any amount, then they will take it out of your refund and readjust your refund amount.
If the amount you owe them is more than what you’re getting back, obviously, they will definitely take your whole refund.
For most taxpayers, that means they owe money in the form of Tax debt from previous years, Child support payments, and even Federal student loans you’ve defaulted on.
When you owe money for any of the reasons stated above, the Internal Revenue Service is legally authorized to withhold part or all of your return money to settle the debts.
The letter you receive regarding this particular situation will explain why you received a notice and obviously what actions the IRS plans to take next.
Just take a look at this screenshot from Reddit:
Here is the meaning of code 151 on the IRS transcript according to the pocket guide:
According to the Internal Revenue Service transaction codes pocket guide, it means “Reversal of Tax Code 150 or 154″.
If you check the IRS master File Codes, here is what tax topic 151 means: “EPMF: Reverses return data (TC 150, 154, 155, 156, 976, 977) or moves a return to a different module”.
If you have received a letter regarding a tax refund, you may see code 151 on your IRS tax transcript.
Sometimes it is uncomfortable when you see take action on the transcript, but that is what it is.
Check this: Explanation For Tax Code 290.
What Should I Do If I Have Code 151 On My 2023 Or 2024 Tax Transcript?
If you have received IRS code 151 with the take action notice, here is what you need to do:
Please wait for about four (4) weeks or so for the Internal Revenue Service to send you an additional letter indicating what documents or information are needed for the final processing of your return.
For further clarifications, please contact the IRS on phone 800-829-1040 (Individuals) and 800-829-4933 (Businesses) from 7 am to 7 pm local time.
Should I Worry About Tax Topic 151 On My 2023 Transcript?
No. You should not worry if you received IRS tax topic 151 irrespective of the year, either 2023 or 2024.
All you need to do is wait for the IRS to send you a second letter with the details on what to do.
However, if that delays, then you can contact the representative or initiate plans to appeal.
Apart from that, you do not have to worry about the notice to take action.
Another guide: What CPT Code 99214 Means.
Is Tax Topic 151 Bad?
As you have seen from the discussion above, the “IRS tax topic 151 take action” is not a bad thing per se.
There is nothing wrong with receiving that tax topic.
All you have to do is contact them for further details as to what you need to do.
If you need to appeal, then you can do that by filing an appeal with IRS or the courts.
Tax Topic 151 Your Appeal Rights
Yes, you need to know the appeal rights available to you when you have 151 on your tax transcript.
It is advisable always to contact the Internal revenue service when you see the code on your transcript.
That is the surest way to mitigate any confusion or misunderstandings you may have.
What Is An IRS Appeal?
An IRS review means you are asking the Internal Revenue Service to make an independent review of your tax dispute.
This way, they will reconsider positions taken on your taxes.
The appeal helps to address any tax disputes fairly and impartially.
How Long Does An IRS Appeal Take For Code 151?
How long an IRS appeal takes largely depends on your particular circumstance.
When you file an IRS appeal, you will work with the Independent Office of Appeal.
This informal process requires no litigation, so the process is faster than filing an appeal at the courts.
Also, an IRS appeal is not expensive as compared to that of the courts.
So an appeal at the IRS does not take long.
With that said, I will suggest you file an IRS appeal for code 151 with a “take action” notice.