An overpayment from a different year was applied to this year's balance. Here is what it means, what usually happens next, and what to do.
On your account transcript it reads: 706 Credit transferred in from another tax period Normal / good news
TC 706 is the receiving end of a transfer: an overpayment from a different tax year (the one showing TC 826) was applied to this year's balance. It reduces what you owe here.
Also written as: IRS code 706, code 706 on transcript, 706 IRS code, transaction code 706.
If the transferred credit pays this year in full, the balance goes to zero and collection notices stop. If not, the remaining balance keeps accruing interest and the notice sequence continues.
| On the same transcript | What it usually means |
|---|---|
| 706 with a balance still due | Partial payment by transfer; the remainder is still owed. |
| 706 bringing the balance to $0 | This year is paid off. |
| 706 here, 826 on the source year | The two halves of one transfer. |
The account balance line shows what remains.
An installment agreement stops escalation.
It documents where the credit came from.
Paste it into the free decoder — every code explained, open holds flagged, refund and offsets summarized. Runs in your browser; nothing is sent anywhere.
Decode my transcript →From another tax period where you had an overpayment — that year shows the matching TC 826, and a CP49 explains the transfer.
Only if the credit covered the whole balance. Check the account balance on the transcript.
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 706, code 706 on transcript, transaction code 706 and TC 706 all refer to the same three-digit transaction code the IRS posts to your account.