If the IRS reviews your return, it means they are verifying information for accuracy, which often delays refunds. You will typically receive a notice by mail, such as a CP05 notice, requesting documentation to support income, deductions, or credits. The review process can last 45 to 180 days, and it may not necessarily lead to a full audit.
The IRS reviews some federal tax returns to determine if income, expenses, and credits are reported accurately. The IRS selects returns for review using various methods; including random sampling, computerized screening, and comparison of information received by the IRS such as Forms W-2 and 1099.
However, certain circumstances like reviews for errors, incomplete information, or identity verification can extend this period. By law, the IRS generally has up to 45 days from the date of the filing deadline to issue a tax refund without owing the taxpayer interest.
The IRS uses a combination of automated and human processes to select which tax returns to audit. Not reporting all of your income is an easy-to-avoid red flag that can lead to an audit. Taking excessive business tax deductions and mixing business and personal expenses can lead to an audit.
Processing your refund usually takes: Up to 21 days for an e-filed return. 6 weeks or more for returns sent by mail.
If your tax return is under review, the IRS is examining it to ensure that it is accurate and in accordance with tax laws. They're checking to confirm that all the information you provided is correct and that there are no mistakes or missing details that could affect your tax bill or refund.
Common IRS audit triggers
What should I do? Request an expedited refund by calling the IRS at 800-829-1040 (TTY/TDD 800-829-4059). Request a manual refund expedited to you.
You may face an IRS audit after an IRS review. If the IRS reviews your information and detects inaccuracies in your tax returns, it may conduct a comprehensive audit to look into the matter further.
Employees will review and either manually release the refund or confirm the error. If an error is confirmed, a notice will be sent to the taxpayer either requesting additional information or informing the taxpayer the error has been corrected through the IRS's math error authority.
A tax refund could be delayed weeks or even months in some cases. The length of the delay may depend on how backed up the IRS is on processing tax returns, whether you turn around requested documentation quickly, and whether you need to file an amended return.
The percentage of individual tax returns that are selected for an IRS audit is relatively small. From 2020-2023, less than 0.50% of individual returns were selected for audits — the lowest of any published audit rate since 1950.
District offices select returns randomly sometimes for special research programs, but generally the returns are selected because they have good audit potential. The potential is discovered by a computerized system called the Discriminant Function System (DIF). In most cases, the decisionmaker is not the auditor.
The stages of an IRS refund are: (1) Return Received, where the IRS acknowledges receipt of your return; (2) Return Reviewed, where the return is checked for accuracy; and (3) Refund Approved/Sent, where the refund amount is finalized and issued.
A review does not automatically mean you are being audited. The IRS may only want to verify some details. If concerns persist, they might request more information. Most reviews end without a full audit.
How Tax Returns Are Selected for Review. Tax returns can be selected for review for several different reasons, and not all of them indicate a problem. In many cases, the IRS uses automated systems that flag returns with numbers that fall outside normal patterns for a given income level or filing status.
The IRS doesn't have a strict maximum time limit for issuing refunds, but generally processes e-filed returns with direct deposit within 21 days, while paper returns take 6 weeks or more, with longer waits for those claiming certain credits (EITC/ACTC) or if errors occur. If the IRS holds your refund for more than 45 days past the tax deadline (or filing date if late), they owe you interest, but significant delays (months) can happen for complex issues or extra reviews, sometimes requiring a mailed notice.
Once the IRS completes the examination, it may accept your return as filed or propose changes. These changes may affect the amount of tax you owe or the amount of your refund.
Why is my return being reviewed? We select some returns to review so we can determine whether income, expenses, and credits are reported correctly. This doesn't mean you made an error or were dishonest.
The report after a review is not considered to provide a professional opinion about the nonprofit's financial statements as a whole. The key difference between an audit and a review is that conducting an audit requires the auditor to obtain independent confirmation or verification of the financial information examined.
The IRS "10k rule" primarily refers to the requirement for businesses and financial institutions to report cash transactions over $10,000 by filing Form 8300 (for businesses) or a Currency Transaction Report (CTR) (for banks), under the Bank Secrecy Act. This rule helps combat money laundering, tax evasion, and terrorist financing, requiring reporting for single transactions or related transactions totaling over $10,000 in cash within a year, with penalties for non-compliance.
The "20k rule" refers to the traditional IRS threshold for reporting income from payment apps and online marketplaces on Form 1099-K: over $20,000 in gross payments AND more than 200 transactions in a calendar year. While a law (the American Rescue Plan) temporarily lowered the threshold to $600, recent legislation, the One Big Beautiful Bill Act (OBBBA) (OBBBA), has reinstated the $20,000/200-transaction rule for tax years starting in 2025, providing relief for casual sellers and gig workers.