Letter 4674C: Identity Theft Post-Adjustment Victim Notification Letter

What Letter 4674C is

The closing letter for an income-related identity theft case that was tax-related (an underreporter, substitute-for-return or refund-hold assessment was built on the disputed W-2 or 1099), where the account is marked TC 971 AC 501 with the literal INCOME (IRM 25.23.13.3(7), Aug. 20, 2026), and for a case the IRS identified itself without a Form 14039, where the marker is TC 971 AC 506 (IRM 25.23.13.3(9)). The manual names it the "Identity Theft Post-Adjustment Victim Notification Letter" and does not reproduce its text.

The deadline

No response required. Not a bill.

What to do

The payer whose document was disowned is not contacted, and the information return is not removed; for wages the IRS separately asks SSA to correct the earnings record on Form 9409 (IRM 25.23.13.3.1, Jan. 31, 2023), while a 1099-NEC, MISC or K stays on file as filed. A payee who shows you this letter and asks for a corrected form is asking on their own initiative; verify against your W-9 and payment records before correcting anything.

A closing letter after an assessment was reversed

Letter 4674C is issued at the end of an identity theft case in which the disputed income had already produced a tax consequence: an underreporter assessment, a substitute return the IRS prepared because the taxpayer appeared to have unfiled income, or a refund held against the apparent discrepancy. Once the IRS confirms that the W-2 or 1099 behind it was not the taxpayer's, it reverses the assessment, releases the refund or the hold, marks the account, and sends this letter to confirm what was done. The same letter is used when the IRS identified the identity theft on its own, without an affidavit from the taxpayer. It is a confirmation, not a request, and it is one of the letters a taxpayer keeps permanently, because it documents that a balance which may appear in old transcripts was removed as identity theft.

The information return stays on file

Reversing the taxpayer's assessment does not delete the payer's information return. For wages, the IRS asks the Social Security Administration to correct the earnings record so the thief's wages do not count toward the victim's benefits; for a 1099-NEC, 1099-MISC or 1099-K there is no equivalent step, and the return remains in the IRS's files exactly as filed, attached to the account with a marker that it was disputed. The payer is not contacted at any point. If the payee comes to you with this letter asking for a corrected form, they are asking on their own initiative, and the right response is the same as for a Letter 4402C: verify against your records before correcting anything, correct if the return was wrong, and document your position if it was right. A payer that paid a person who presented the victim's SSN may also have a worker whose own identity needs re-verifying. The payee claims section covers the decision, and the payee CP2000 guide covers the underreporter case that usually precedes this letter.

Questions about Letter 4674C

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