291 | Reduced tax assessed
This code indicates that previously assessed tax has been reduced on the account.
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What This Code Means
Code 291 reflects a decrease in assessed tax. It represents a correction or adjustment that lowers the taxpayer’s liability. The code may follow review, amended return processing, or internal correction. It does not confirm refund issuance, but it reduces the balance owed or increases overpayment. The transcript entry includes the amount reduced.
Where Users Usually See This Code
- On IRS account transcripts
- After adjustment or amended return processing
- In connection with notice codes
Why This Code Appears
- Correction of prior assessment
- Successful amendment reducing liability
- Administrative adjustment by IRS
- Examination outcome reducing assessed tax
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What Typically Happens Next
- Account balance decreases
- Refund issuance may occur if overpayment results
- Notices may be issued
What This Code Is Not
- It is not a refund issuance by itself
- It is not a freeze or hold
- It does not specify reason without supporting entries
Troubleshooting Checklist
- □ Review transcript balances after reduction
- □ Monitor for refund issuance entries
- □ Review notice codes for context
- □ Consult official IRS resources if needed
Notes And Edge Cases
Reduced assessments may appear as separate entries rather than replacing original codes. The transcript should be reviewed in full to understand cumulative impact. Timing between assessment and reduction entries can vary.
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