Do You Get Your Tax Refund If You Get Audited?

The short answer: yes, in most cases you will eventually receive your tax refund even if you are audited, but the timing depends on several factors. The type of audit, when it occurs in the filing process, and the outcome all influence whether your refund is delayed, reduced, or released in full.

If you are anxiously checking “Where’s My Refund?” and seeing delays or have received an IRS letter about your return being under review, you are not alone. Millions of taxpayers experience refund holds each year, and understanding why this happens can help ease your concerns. 

How Audits Affect Your Tax Refund?

Not all audits affect your refund the same way. The impact depends largely on when the IRS initiates the examination and what issues they are reviewing.

When the IRS Holds Your Refund?

The IRS may hold your refund in several situations:

• Pre refund verification: If the IRS flags your return before issuing your refund, they will hold the entire amount until verification is complete. This commonly occurs with returns claiming the Earned Income Tax Credit (EITC) or Additional Child Tax Credit (ACTC). By law, the IRS cannot release EITC or ACTC refunds before mid February each year. For tax year 2025 returns filed in 2026, the IRS cannot issue these refunds before February 15, 2026. The IRS expects most EITC/ACTC refunds to be available in bank accounts by March 2, 2026, for those who filed early, chose direct deposit, and have no other issues with their returns.
• Income discrepancy review: When income reported on your return does not match information the IRS received from employers or financial institutions, they may hold your refund while investigating.
• Letter 4464C situations: This letter indicates the IRS is holding your refund while they verify information on your return. Important: Letter 4464C is a verification hold letter, not an audit notice. While your refund is frozen during this review period (typically up to 60 days), receiving this letter does not mean you are being audited.
• Suspected identity theft: If the IRS suspects someone filed fraudulently using your information, they will hold the refund until you verify your identity.

When You Still Get Your Refund?

Your refund typically is not affected when:

• The audit involves a prior year’s return (not the current filing)
• You are in a correspondence audit that resolves quickly with documentation
• The IRS already issued your refund before selecting your return for examination
• The audit results in no changes or changes in your favor

If the IRS audits a previous year’s return while processing your current return, the current year’s refund usually processes normally unless the prior year audit reveals issues that affect your current filing or results in taxes owed that get offset against your new refund.

Understanding IRS Letter 4464C

Letter 4464C is one of the most common notices taxpayers receive when their refund is delayed. Understanding what it means and how to respond can help resolve your situation faster.

What Letter 4464C Means?

IRS Letter 4464C notifies you that the IRS is holding your refund while they verify information on your return. This is not an audit. Letter 4464C is specifically a review or verification hold letter. However, the practical effect feels similar to taxpayers because your refund is frozen until the IRS completes their review.

Common reasons for receiving Letter 4464C include:

• Income reported on your return does not match W 2s or 1099s in IRS records
• Withholding amounts claimed do not match employer reports
• You claimed credits that require additional verification (EITC, education credits)
• Your return was flagged by IRS fraud detection systems
• Information returns from employers or payers were filed late

The letter states the IRS needs up to 60 days to complete their review. In some cases, this timeline extends if additional documentation is needed or if there are processing delays.

How to Respond to Letter 4464C?

When you receive Letter 4464C, follow these steps:

• Verify it is legitimate: The letter should reference your specific tax return details. Be cautious of scams. The IRS sends official notices by mail, not email or phone.
• Gather your documentation: Collect your W 2s, 1099s, and any other income documents. Have records showing taxes withheld and credits claimed.
• Wait the initial period: The letter typically asks you to wait 60 days before calling. In many cases, the IRS resolves the issue without requiring action from you.
• Call if directed: If the 60 days pass without resolution or the letter instructs you to call, contact the IRS using the number on the letter, not a number from an internet search.
• Respond to any requests: If the IRS sends a follow up requesting specific documents, respond promptly with exactly what they request.

Refund Scenarios During Different Audit Types

Different types of IRS examinations affect your refund in different ways. Understanding these scenarios helps set realistic expectations.

Correspondence Audit and Refunds

Correspondence audits, conducted entirely by mail, are the most common type and often have minimal impact on refunds. If your current year’s refund was already issued before the IRS selected your return for a correspondence audit, you typically keep the refund unless the audit finds you owe additional tax.

If issues are found during a correspondence audit, the IRS will send you a Notice of Proposed Changes explaining the adjustments and any additional tax owed. You have the right to respond with documentation or explanations before any changes become final. If additional tax is assessed after the audit concludes, the IRS will send a bill for the balance due. Under normal IRS offset rules, any unpaid tax debt may be collected by offsetting (reducing) your future year refunds until the balance is paid.

Office and Field Audits

More extensive office and field audits are more likely to affect your refund, especially if the IRS opens the examination before releasing your refund. During these audits:

• The IRS may hold your current refund pending audit completion
• Any refund owed may be offset against audit assessments from prior years
• Multiple years may be examined, affecting multiple potential refunds
• Resolution takes longer, extending refund delays

For more information on the IRS audit process and what to expect, review our comprehensive guide.

Identity Verification Holds

Identity verification holds are not technically audits, but they feel similar to taxpayers because the refund is frozen. The IRS implements these holds when they suspect potential identity theft or fraudulent filing.

To resolve an identity verification hold:

• Respond to any letters requesting identity verification
• Use the IRS Identity Verification Service online if directed
• Call the number provided in your letter to verify your identity by phone
• Be prepared to answer questions about your prior tax returns and personal information

Once your identity is verified, the IRS typically releases your refund within six to nine weeks.

How to Check Your Refund Status During an Audit

Using IRS Tools

The IRS provides several tools to check your refund status:

What Different Status Messages Mean

When checking your refund status, you may see various messages:

• “Return Received”: The IRS has your return but has not processed it yet.
• “Refund Approved”: Processing is complete and your refund is scheduled for release.
• “Still Being Processed”: Your return requires additional review. This may indicate a verification hold.
• “Refund Sent”: Your refund has been issued via direct deposit or mailed check.
• “Refer to Tax Topic 152”: This message indicates your refund is temporarily on hold and processing is delayed. Important: Tax Topic 152 does not necessarily mean you are being audited. This status can also appear during routine EITC or ACTC verification holds, identity verification reviews, or general processing delays. It simply means the IRS needs additional time to process your return.

What Happens to Your Refund After the Audit

Audit Results and Refund Outcomes

Once your audit concludes, your refund outcome depends on the results:

If the audit determines you owe more than your refund amount, the IRS will send a bill for the difference. You have the right to appeal audit findings you disagree with before any final assessment.

How to Speed Up Your Refund During an Audit

Respond Promptly and Completely

While you cannot control IRS processing times, you can avoid delays on your end:

• Respond immediately to IRS requests: Do not wait until the deadline. Faster responses mean faster resolution.
• Provide complete documentation: Include everything requested the first time. Incomplete responses cause additional delays.
• Keep copies of everything: Maintain records of all documents sent and correspondence received.
• Monitor your account: Check “Where’s My Refund” regularly and respond to any status changes.
• Consider professional help: A CPA or Enrolled Agent experienced with IRS audits can help ensure your responses are complete and accurate. While professional representation does not reduce IRS statutory processing timelines, it can prevent unnecessary delays caused by errors, incomplete documentation, or miscommunication with the IRS.

Need Help With Your Audit?

If your refund is being held due to an audit or verification review, professional representation can help protect your interests and ensure efficient communication with the IRS.

Manay CPA can help by:

• Communicating with the IRS directly on your behalf
• Gathering and presenting required documentation efficiently
• Identifying and resolving issues causing refund delays
• Ensuring responses are complete and accurate to avoid additional delays
• Representing you if the audit expands or disputes arise

With over 20 years of experience helping clients nationwide, our team understands how to navigate IRS processes efficiently. Refund delayed due to an audit? Contact Manay CPA for a free consultation to discuss your options.

Frequently Asked Questions

How long can the IRS hold my refund for an audit?

There is no set legal limit on how long the IRS can hold your refund during an audit. Most verification reviews complete within 60 days, but complex audits may take six months to a year or longer. If your refund is delayed more than 45 days past the filing deadline (or when you filed, whichever is later) due to IRS processing, you are entitled to interest on the delayed amount.

Can I get a partial refund during an audit?

Generally, no. The IRS typically holds your entire refund until the audit or verification is complete. They do not release partial amounts while issues remain unresolved. However, once the audit concludes, any portion of your refund not affected by the findings is released promptly.

Will I get interest if my refund is delayed by an audit?

Yes, potentially. If your refund is delayed more than 45 days past the filing deadline (April 15 for most taxpayers) or 45 days past when you actually filed, whichever is later, due to IRS processing rather than errors on your return, you are entitled to interest on the delayed refund amount. The interest rate is set quarterly by the IRS.

What if I need my refund urgently during an audit?

Unfortunately, financial hardship generally does not expedite refund release during an audit. The IRS must complete their verification process. However, if you are experiencing significant hardship, you may contact the Taxpayer Advocate Service (TAS) for assistance. TAS can sometimes intervene when IRS delays are causing serious financial problems, but it is important to understand that TAS intervention is exceptional and not guaranteed. TAS prioritizes cases involving imminent financial harm, and they cannot override IRS verification requirements.

References

IRS: Where’s My Refund FAQ

IRS: Understanding Your Letter 4464C

IRS: Refund Timing

IRS: Identity Verification

Taxpayer Advocate Service