706 | Interest adjustment

Industry

IRS / Tax

Canonical

/irs-tax/error-codes/706/

Last Updated

Feb 25, 2026

Summary

This code indicates that an adjustment to previously assessed interest has been applied to the account.

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What This Code Means

Code 706 reflects a modification to the interest previously calculated on the account. The adjustment may increase or decrease the total interest owed depending on the circumstances. This entry represents a recalculation based on updated balances, payments, or corrections. The code does not specify the reason for the change beyond indicating interest modification. It reflects administrative recalculation within IRS systems.

Where Users Usually See This Code

On IRS account transcripts
After payments or balance changes
In connection with other adjustment entries

Why This Code Appears

A payment altered interest calculations
Account balance changed due to assessment or reduction
Administrative correction required recalculation
Timing of payment affected interest accrual

What Typically Happens Next

The account balance may update
Additional interest entries may appear
Payment or offset activity may follow

What This Code Is Not

It is not a tax assessment
It is not a refund issuance
It does not represent principal tax amount

Troubleshooting Checklist

□ Review updated account balance
□ Confirm payment dates align with interest changes
□ Monitor for additional adjustments
□ Consult official IRS resources if clarification is needed

Notes And Edge Cases

Interest adjustments may appear multiple times depending on balance changes. The transcript amount reflects the adjusted interest value at posting. Reviewing chronological entries provides clarity on cumulative impact.

Related Codes

8 links

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