Are you looking for what IRS code 706 means? If that is the case, then you are in the right place.
This article focuses on what code 706 means on the IRS tax transcript.
Most people become worried when they see code 706 on their tax transcript and when they go to the WMR dashboard.
That should not be the case any longer.
The main objective of this guide is to explain in detail what the IRS transaction code 706 means on the tax transcript.
Please note that this post is purely for educational purposes and does not claim to have any tax expertise. Neither do we have any authorization or association with the IRS.
That being said, you should not rely solely on this guide concerning your taxes since each state has different laws.
The Actual Meaning Of IRS Code 706 According To The Pocket Guide
According to the Internal Revenue Service Pocket Guide, code 706 means Generated Overpayment Applied from Another Tax Module.
That is the broad meaning of the tax transaction code 706.
Though this is self-explanatory for code 706, let us take a closer look at what it means in detail.
Please note that code 706 on the tax transcript has a different meaning from the IRS tax code section 706.
Section 706 deals with Taxable Years of Partner and Partnership, which is totally different from the tax code 706 on the transcript with mainly deals with overpayments.
What Does Code 706 Mean According To The IRS Master File Codes?
Below is the detailed meaning of the IRS tax transaction code 706:
An ECC computer generated transaction in the amount of a credit offset into a Tax Module. A TC 826 debit transaction is the corresponding entry. Before generating a refund, the computer analyzes all Tax Modules in the account and offsets the credit to any Tax Module with a balance past due.
That is the explanation given to the tax code 706 according to the Master File codes of the Internal Revenue Service.
What To Do If I Have Generated Overpayment On My 2021/2022 Tax Transcript?
Most people get frustrated when they see code 706 on their tax transcripts. But that should not be the case.
At least now that you know what IRS code 706 means on your tax transcript.
Here is what you need to do if you are affected by the Generated Overpayment code.
Please contact the Internal Revenue Service representative for further details in your particular circumstance.
That is all you need to know about the IRS code 706 on the 2021/2022 tax transcript.
Here is the list of other IRS codes and their ultimate guides:
Follow the guides above for more details about the tax codes.