720 | Accrued interest

Industry

IRS / Tax

Canonical

/irs-tax/error-codes/720/

Last Updated

Feb 25, 2026

Summary

This code indicates that interest has accrued on the outstanding tax balance.

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What This Code Means

Code 720 reflects the addition of accrued interest to the account. This entry represents interest calculated on unpaid balances over time. It increases the total amount owed until payments or adjustments reduce the principal. The code does not indicate penalties or new tax assessments, only interest accumulation. It reflects ongoing financial calculation within IRS systems.

Where Users Usually See This Code

On IRS account transcripts
During periods of outstanding balance
In connection with payment or assessment entries

Why This Code Appears

A balance due remains unpaid
Time elapsed since original assessment
Payment timing resulted in interest calculation
Administrative adjustments altered balance

What Typically Happens Next

Account balance increases
Additional interest entries may post over time
Payment activity may reduce total owed

What This Code Is Not

It is not a penalty assessment
It is not a tax increase
It is not a refund-related entry

Troubleshooting Checklist

□ Review total balance including interest
□ Monitor for payment posting
□ Confirm payment dates and amounts
□ Consult official IRS resources if clarification is needed

Notes And Edge Cases

Interest accrues daily until balances are resolved. The transcript amount shows cumulative interest posted at that time. Reviewing payment history helps determine how interest accumulated.

Related Codes

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