IRS Letter 707C is a hold notice: the IRS has paused your refund or return while it takes a closer look at something on your filing. It is not an audit, and it does not by itself mean you owe more tax. What it means for you depends on one thing, which is whether the letter simply informs you of a delay or asks you to send documents by a specific date.
Read the Letter Before Anything Else
The notice number and date sit near the top of the page. The body explains what happened and what, if anything, the IRS needs from you. If there is a response deadline, that is the most important detail on the letter. Miss it and the IRS may finish its review without your input, which usually means a smaller refund or a balance due.
The letter should identify the tax year under review. Some versions are purely informational and tell you processing will take longer. Others request specific documents or explanations. Sort out which one you have before you do anything else, because an informational hold calls for patience and a document request calls for action.
Confirm the Letter Is Genuine
IRS letters arrive by mail, not by email or text. A real Letter 707C will reference your Social Security number or taxpayer identification number, a specific tax year, and a notice number. If anything looks off, call the number printed on the letter, or the main individual taxpayer line at 800-829-1040, to confirm the IRS sent it.
While you’re at it, pull the return for the year in question along with the supporting documents you used to prepare it: W-2s, 1099s, receipts for deductions, and any schedules you attached. Having those in hand before you respond saves time and cuts down on follow-up requests.
If the Letter Asks for Documents
Respond by the stated deadline using the method the letter specifies. Most IRS correspondence includes a return envelope or a fax number. Keep the response focused on exactly what was asked. If the IRS wants proof of one deduction, send records for that deduction, not your entire financial history. Reviewers work faster through clean, focused responses than through a box of unsorted paperwork.
Label every page with your name, Social Security number, and the notice number. Make copies of everything you send. If you mail your response, use certified mail with return receipt so you have proof of delivery; a fax confirmation does the same job. The IRS processes millions of pieces of mail, and delivery proof protects you if something goes missing.
Need more time? Call the number on the letter and ask for an extension before the deadline. The IRS often grants more time if you ask proactively. Explaining why you’re late after the fact is a much harder conversation.
If the Letter Is Informational, Track the Refund
When there’s nothing for you to send, the wait is the whole assignment. Check your refund status using the IRS “Where’s My Refund?” tool at irs.gov or the IRS2Go app. You’ll need your Social Security number, filing status, and the exact refund amount from your return. The tool updates once a day, usually overnight, so checking more often won’t give you anything new.
During a 707C hold, the tool may say your return is still being processed or that a refund date will appear when available. Those messages are normal for this situation. They don’t signal that something else has gone wrong beyond the delay the letter already described.
When to Call the IRS
Call if the letter is unclear about what’s needed, if your refund hasn’t arrived within the timeframe the letter estimated, if you responded and haven’t heard back in 60 days, or if you believe the hold rests on incorrect information. Use the phone number printed on the letter rather than a general IRS number; that line routes you to the unit handling your case.
If more than 60 days have passed beyond normal processing and the issue still isn’t resolved, you can contact the Taxpayer Advocate Service at 877-777-4778. TAS is an independent organization within the IRS that helps taxpayers facing financial hardship from IRS actions or whose cases haven’t moved through normal channels.
When to Bring in a Tax Professional
Most 707C situations resolve on their own or with a straightforward document submission, and you probably don’t need to hire anyone if the letter is informational or asks for records you already have.
Consider a CPA or enrolled agent if the IRS is questioning a significant deduction or credit, if the letter suggests an adjustment that would create a tax liability, if you’re self-employed and the IRS is reviewing your business income, or if the review appears to be escalating. A tax professional can communicate with the IRS on your behalf once you file Form 2848, Power of Attorney and Declaration of Representative, which authorizes them to act as your representative.1Internal Revenue Service. About Form 2848, Power of Attorney and Declaration of Representative
What the Outcome Letter Will Say
Once the review is done, the IRS will send a follow-up letter. The outcome usually falls into one of three categories:
- No changes. The IRS accepted your return as filed and your refund will be released.
- Adjustments to your return. The IRS is changing something, which could increase or decrease your refund. The follow-up letter will explain each change and show the revised numbers.
- More information needed. The initial review raised new questions and the IRS will ask for additional detail. This doesn’t mean anything is wrong; the reviewer needs more to work with.
If you disagree with an adjustment, you have the right to dispute it. The notice explaining the change will include instructions for responding, usually by calling the number on the notice or submitting a written response with supporting documentation. If you can’t resolve the disagreement informally, the IRS has a formal appeals process through the Independent Office of Appeals, which reviews disputes independently from the office that made the original decision.2Internal Revenue Service. Charity and Nonprofit Audits – Appeal Rights and Procedures
Mistakes That Make It Worse
Ignoring the letter is the most expensive one. If the IRS asked for information and you don’t send it, the IRS will decide based on what it already has, which usually means a smaller refund or a bill. Reopening a closed determination is far more work than answering on time.
Calling repeatedly for status updates before the stated processing time has passed won’t speed anything up. If the letter said 60 days, give it 60 days before you follow up.
Sending more than the IRS asked for can actually slow things down. Answer what was asked, label every page, and stop there. And don’t assume the letter means you’re being audited: a processing delay and a formal examination are different things, and Letter 707C sits on the less serious end. Respond on time, keep good copies, and in most cases the refund arrives within a few weeks of clearing up whatever the IRS flagged.