At some point, you may discover a letter from the IRS in your mailbox. The IRS always communicates by mail, so you’ll never receive these notices by email or phone. One letter the IRS sends is a Notice of Deficiency (CP3219N). This notice, sometimes called a “90-day letter” is a final, formal notice from the IRS that you owe more taxes than you paid.
Getting a Notice of Deficiency doesn’t mean you must pay the amount shown immediately. You still have legal options. If you receive an IRS Notice of Deficiency in Phoenix, you should contact a tax controversy attorney at Dayes Law Firm. We can answer your questions and help you resolve your tax issues.
What is a Notice of Deficiency?
An IRS Notice of Deficiency means that your stated income on your tax returns does not match the third-party information the IRS uses to calculate your taxes. For instance, your W-2s do not match the quarterly withholding reports filed by your employer. The IRS may also send a Notice if you did not respond to an earlier notice.
The Notice of Deficiency gives you 90 days from the date you receive it to either agree and pay the disputed amount, or to file a petition with the U.S. Tax Court. If you ignore the Notice, the IRS can legally begin collection proceedings.
Payment and Petition Options
If you agree with the amount the IRS says you owe, you can sign the agreement that is included with the Notice and pay the amount. You can also obtain a request to file an amended return at a local tax office or online (Form 1040-X) and file a new tax return with the corrected amount.
Filing an amended tax return lets you set up a payment plan with the IRS if you are unable to pay the full amount. If you agree with the correction but cannot pay in full, this may be a good option. You should review the amended return with a tax attorney to be safe.
If you disagree with the notice or the amount of payment, you must file a petition with the U.S. Tax Court, and should have legal representation before filing this petition.
Filing a Petition
After receiving an IRS notice of Deficiency, our Phoenix attorney can explain the process of filing your petition in tax court before the 90-day deadline expires. If you miss the deadline, the IRS can begin collections, including additional penalties, property liens, wage garnishments, and seizures.
Once the deadline passes, you’ll need to pay the full amount before you can appeal the IRS decision. However, the IRS may begin the appeals process itself as soon as you send in the petition. It’s in your best interest to either pay or petition the IRS as soon as possible. There are ways to challenge the IRS once the deadline passes, but they are time-consuming and expensive.
Get Legal Help with Addressing Your IRS Notice of Deficiency in Phoenix
Receiving an IRS notice can be an unnerving experience, but it doesn’t mean you must pay more taxes immediately. The Phoenix attorneys at Dayes Law Firm can give you advice about your IRS Notice of Deficiency and help you resolve any problems before the deadline expires. Contact our office today for a free and confidential consultation.
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