The estimated tax (underpayment) penalty for not paying enough during the year. Here is what it means, what usually happens next, and what to do.
On your account transcript it reads: 176 Penalty for not pre-paying tax Adds to what you owe
TC 176 is the estimated tax penalty — charged when withholding and estimated payments during the year did not cover enough of the tax. It is computed like interest on each quarter's shortfall.
Reversal code: TC 177 — Estimated tax penalty abated. When it posts after this code, the effect above is undone.
Also written as: IRS code 176, code 176 on transcript, 176 IRS code, transaction code 176.
It can be reduced or removed through Form 2210 methods (safe harbors, the annualized income method) and waivers for casualty, disaster, or retirement or disability in qualifying years. TC 177 shows an abatement.
| On the same transcript | What it usually means |
|---|---|
| 150 + 176 | Penalty assessed with the return. |
| 176 then 177 | Penalty reduced or removed. |
Paying 100% of last year's tax (110% at higher incomes) generally avoids it.
Uneven income often shrinks it.
That is the durable fix.
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Decode my transcript →It is not eligible for first-time abatement, but Form 2210 calculations and waivers can reduce or eliminate it.
An abatement of the estimated tax penalty.
On your IRS account transcript for the tax year — in your IRS Online Account under tax records, or by mail using Form 4506-T. The transactions section lists each code with its description, date and amount. Return transcripts do not show transaction codes.
Yes. IRS code 176, code 176 on transcript, transaction code 176 and TC 176 all refer to the same three-digit transaction code the IRS posts to your account.