What Does 977 Mean on Tax Transcript

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What Does 977 Mean on Tax Transcript?

When individuals receive their tax transcripts from the Internal Revenue Service (IRS), they may come across various codes and numbers. One such code that often raises questions is “977.” This code, typically found on the “Transaction Code” section of the tax transcript, has a specific meaning related to the processing of tax returns. Understanding what this code signifies can help taxpayers gain insight into the status of their tax return and any possible actions required.

The code “977” on a tax transcript represents a “Borrower Defense to Repayment Discharge” for student loans. It indicates that the borrower has requested loan forgiveness through the Borrower Defense to Repayment program, which allows individuals to seek relief from federal student loans if they were defrauded by their school. This program is administered by the U.S. Department of Education.

When a taxpayer sees the code “977” on their tax transcript, it means that their request for student loan discharge has been processed, and the IRS has transmitted the necessary information to the Department of Education. However, it is essential to note that this code does not guarantee the approval or denial of loan forgiveness. The Department of Education will review the borrower’s application and make the final determination.

Frequently Asked Questions (FAQs):

1. Does the code “977” mean my student loans have been forgiven?
No, the code “977” only indicates that your request for loan forgiveness has been processed by the IRS and sent to the Department of Education. The final decision rests with the Department of Education.

2. How long does it take for the Department of Education to review my application?
The review process can vary, but it typically takes several months for the Department of Education to evaluate and make a decision on the borrower’s application for loan discharge.

3. Will I be notified if my loan forgiveness request is approved or denied?
Yes, the Department of Education will notify you in writing about the status of your loan forgiveness request.

4. Can I continue making payments on my student loans while my application is being reviewed?
Yes, it is generally recommended to continue making payments on your student loans until a final decision is made on your loan forgiveness application.

5. If my loan is forgiven, will I receive a refund for the payments I made during the review process?
It depends on the Department of Education’s decision. If your loan is forgiven, they may provide a refund for the payments made during the review period. However, this is determined on a case-by-case basis.

6. Can I appeal a denial of loan forgiveness?
Yes, if your loan forgiveness request is denied, you may have the opportunity to appeal the decision and provide additional supporting documentation.

7. Will the code “977” affect my tax return in any way?
The code “977” does not directly impact your tax return. It solely represents the processing of your loan forgiveness request.

8. What should I do if I have questions or need assistance regarding my loan forgiveness application?
If you have questions or need assistance regarding your loan forgiveness application, you should contact the Department of Education’s loan servicer or reach out to the Federal Student Aid Information Center for guidance.
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