No. It is a determination that additional tax is owed. The IRS has not assessed it yet, which is what the petition period is for.
IRS Notice of Deficiency
A Notice of Deficiency is the IRS telling you it has determined you owe more tax than your return reported.
It also gives you a specific period to take the matter to the U.S. Tax Court before the IRS assesses the tax. That is why it is often called a 90-day letter.
Start with the notice. On it you will find the tax year involved, what the IRS changed, and the last day shown for filing a petition with the U.S. Tax Court.
How to Tell If This Is What You Have
The notice will say Notice of Deficiency somewhere on it, and it will state a last day to file a petition with the U.S. Tax Court.
The IRS sends it under a few different letter numbers depending on where the case came from.
- Letter 3219, when the examination was handled by mail.
- Letter 531, when the examination was handled in person.
- CP3219A, when the case came out of the IRS matching program after a CP2000.
More About CP3219A
How Long You Have
A Notice of Deficiency generally gives you 90 days from the date of the notice to file a petition with the U.S. Tax Court. If the notice is addressed to you outside the United States, the period is generally 150 days.
The IRS is required to print a last day to file on the notice. If that printed date falls later than the 90 day count, the printed date is the one that controls.
The deadline shown on the notice needs to be taken seriously.
What Can You Do With a Notice of Deficiency?
You can file a petition with the U.S. Tax Court within the period shown on the notice. Filing a petition stops the IRS from assessing the tax while the case is pending, and it puts the disagreement in front of the Court without paying the amount first.
You can also let the period run without petitioning. If no petition is filed, the IRS may assess the tax and begin its normal billing and collection process.
Paying an assessed tax and later pursuing a refund claim can be another route in some disputes, but that is a separate process and isn’t covered on this page.
A Notice of Deficiency Is Not a Tax Bill
A Notice of Deficiency is the IRS’s determination that additional tax is owed. It comes before the additional tax described in the notice is assessed.
It is also different from a collection notice. The purpose of this notice is to tell you what the IRS determined and provide the period for petitioning the U.S. Tax Court.
Where Did the Additional Tax Come From?
The number on a Notice of Deficiency came from something the IRS changed.
It could involve income the IRS says wasn’t reported, a deduction or credit it changed or disallowed, the tax treatment of a transaction, or another adjustment.
That’s why I don’t start by looking only at the balance. I want to know what the IRS changed and why.
The tax return, examination report, earlier IRS correspondence, and records behind the disputed items help tell that story.
Where the 90-Day Letter Comes From
Most Notices of Deficiency follow either an examination or a document matching case.
- The examination path: an IRS audit, then Appeals if the matter is not resolved, then a Notice of Deficiency.
- The matching path: a CP2000 proposing changes, then a CP3219A if it is not resolved.
Knowing which path produced the notice helps identify what the IRS changed and what happened before the notice was issued.
This Process Was Part of My Work Long Before Tax Court
I wrote about IRS examinations and Appeals in my first book, IRS Secrets Revealed: How to Survive IRS Audit, Collections & Appeals.
I wrote that book before I was admitted to practice before the U.S. Tax Court. By then, I had already spent years representing taxpayers as IRS disputes moved through examination and Appeals.
My later Tax Court admission expanded where that representation can continue.
If the Matter Goes to Tax Court
I am admitted to practice before the United States Tax Court as a non-attorney practitioner.
If I have already been representing you before the IRS, that means a qualifying matter does not automatically have to be handed to someone new simply because a Tax Court petition becomes necessary.
If you’re coming to me for the first time with a Notice of Deficiency, I can review where the case stands and whether Tax Court representation is appropriate for the matter.
Frequently Asked Questions
If you agree, the notice explains how to indicate that. Agreeing generally leads to assessment and a balance due, and from there the question becomes how the balance gets paid or resolved.
How and where the IRS mailed a Notice of Deficiency can matter. If you learned about the deficiency after the notice date or believe the notice wasn’t properly sent, the mailing history and the facts need to be reviewed.
Don’t assume from a webpage what rights you may or may not still have.
The mechanics are that the IRS may assess the tax and move into its normal billing and collection process. Whether any court option remains depends on specifics I would need to look at, and I am not going to guess at that from a web page. If your date has passed, bring the notice and let’s look at it.
Received a Notice of Deficiency?
Start with the notice.
Bring the notice and anything the IRS sent before it.
I’ll start by looking at the tax year involved, what the IRS changed, the date shown for filing a Tax Court petition, and what happened before the notice was issued.
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General information only, not tax or legal advice. Individual situations vary.