Tax Dictionary – 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
More from H&R Block
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.
Learn more about IRS Letter 5041 and how to handle an inquiry of your business' income with help from the tax experts at H&R Block.
Learn more about notice CP06A, why you received it, and how to handle an IRS CP06A notice with help from the tax experts at H&R Block.
Learn more about IRS Letter 6000 and how to file an unfiled tax return with help from the tax experts at H&R Block.
If you receive a Form 1099-C, you need to determine if you'll be taxed on the amount of your debt that was canceled or forgiven. Learn more from H&R Block.