Statutory Notice of Deficiency
A notice of deficiency, also called a statutory notice of deficiency or 90-day letter, is a legal notice in which the IRS Commissioner determines the taxpayer’s tax deficiency. Tax laws require that the IRS issue a notice of deficiency before assessing additional income tax, estate tax, gift tax and certain excise taxes unless the taxpayer agrees to the additional assessment. The notice of deficiency is a legal determination that is presumptively correct and consists of the following:
- A letter explaining the purpose of the notice, the amount of the deficiency, and the taxpayer’s options
- A waiver to allow the taxpayer to agree to the additional tax liability
- A statement showing how the deficiency was computed
- An explanation of the adjustments
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If you get a statutory notice of deficiency, you have 90 days to file a petition with the U.S. Tax Court to appeal taxes the IRS thinks you owe. You would receive this letter if you didn’t respond to a previous letter allowing you 30 days to appeal within the IRS, or if your appeal was unsuccessful.
If you don’t file a petition with the Tax Court by the deadline shown on the statutory notice of deficiency, the IRS will send you a bill for the tax, penalties, and interest shown on the notice.
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