08/11/2025
Top 10 reasons for 570 code
1️⃣ High withholding compared to income
Example: W-2 shows $20,000 in wages but $15,000 in federal withholding.
🚩 The IRS knows most employers don’t withhold 75%+ of wages unless something extreme happened.
2️⃣ W-2s from small/unknown employers
Especially if the EIN is brand new or the employer isn’t in SSA’s database.
🚩 IRS will double-check with the employer to verify wages & withholding.
3️⃣ Big refundable credits with low income
EITC + ACTC + AOTC stacked together on very small reported income.
🚩 This is one of the most abused setups in fraudulent returns, so their filters grab it fast.
4️⃣ HOH (Head of Household) with no dependents on IRS file
Or dependents that are claimed by multiple people.
🚩 IRS pulls returns for relationship & residency proof before releasing refunds.
5️⃣ First-time filer or big refund jump
Going from no refund or small refunds to suddenly $7k–$12k raises flags.
🚩 Especially when coupled with new income sources or new credits.
6️⃣ W-2 from temp agencies + high withholding
Temp agencies are a top target for fake W-2 schemes, so these get extra scrutiny.
7️⃣ Amended returns with huge refund changes
Especially when the amendment adds “forgotten” income with large withholding or new credits.
8️⃣ Missing third-party matches
Example: You report a 1099 but IRS hasn’t gotten it yet from the payer.
🚩 The IRS holds until they reconcile your numbers with their database.
9️⃣ Identity theft red flags
Address changes, bank account changes, or a return filed very early/very late compared to normal.
🔟 Prior-year fraud indicators
If the taxpayer had a prior-year refund frozen, offset, or reversed, their account is often automatically flagged for manual review.
Bottom line: Most 570s are pattern-based holds — they don’t care if it’s actually fraudulent, they care if it looks like the thousands of bad returns they’ve already seen. If you know these patterns, you can prep your clients’ documentation ahead of time or adjust how/when you file to avoid the pause.
