What does reference code 1571 on irs wheres my refund stand for?

Code 1571 is a refund freeze for a suspected fraudulent return. It's unlikely that the IRS will take any action at all on your return at this stage.

You will need to engage the Taxpayer Advocate https://www.irs.gov/advocate/local-taxpayer-advoca... to get this moving.

Returns reporting self-employment income where there is no Form 1099-MISC in the system are a major fraud indicator when the EIC is claimed. A first ever tax return claiming this type of income would go straight to the freeze queue and would not be acted upon until the taxpayer goes through the TA service, and even then prying things loose will be problematic.

You are required by law to keep accurate business records. That includes invoicing customers, issuing receipts for payments and keeping copies of those receipts, keeping receipts for all items purchased for your business, etc. You should also show bank deposits that reconcile to the sales receipts and bookkeeping entries that account for any cash that was received but not deposited as well as canceled checks or credit card statements showing payment for purchases. When filing your return you are required to claim all business expenses, even if they reduce your refund.

Lacking proper business records the IRS typically ignores these returns as fraudulent. If you press the matter they may determine that it's not earned income qualifying for the EIC and Additional Child Tax Credit but unearned hobby income reported on Form 1040, line 21. You'll pay tax on that amount but won't get the EIC or ACTC. I've also seen a couple of cases where they accepted it as self-employment income but denied the EIC and ACTC for inadequate record keeping. That can quickly turn an expected refund into a tax bill of a few thousand dollars.

They are reviewing the return for the child tax credit and EIC especially since you're self employed. There is a lot a fraud involving returns like yours that claim fake businesses in order to qualify for EIC, or don't report the income and expenses honestly. You may receive correspondence from them asking you to prove the existence of your business.

So, you have self-employment income where no 1099-Misc forms are issued. Did you keep a list of your clients? Did you have them pay you by check, credit card or paypal so you have proof you were paid?

In all likelihood, your tax return is being held, pending a decision of whether or not to audit you.