Notice Of Deficiency

View more Business & Finance videos

A letter from the Internal Revenue Service that advises a taxpayer about delinquent taxes owed plus any penalties and interest. A notice of deficiency is sometimes also called a 90-day letter because it gives the taxpayer 90 days to dispute the tax assessment. If the taxpayer disagrees with the assessment, he or she can file an appeal with the U.S. Tax Court.

Investopedia Says:

Sometimes a taxpayer can resolve a dispute with the IRS without going to court by going through an appeal process. The Request for Appeals Review form asks the taxpayer to list each item of the IRS decision that is in dispute and why. Taxpayers can represent themselves during the appeals process or hire a certified public accountant, attorney or enrolled agent to represent them. The IRS does not allow taxpayers to disagree based on moral, religious, political, constitutional or conscientious objection grounds.

Related Links:
Keeping thorough records and knowing the penalties make this experience easier than you'd expect. Surviving The IRS Audit
We clarify some rules that often puzzle taxpayers. 3 Common Tax Questions Answered
If you can't pay your taxes, there are some steps you can take to protect yourself. Discover your options here. When You Can't Pay Uncle Sam
The auditor's review isn't always the last word. Many taxpayers who are audited can successfully appeal their audits and save thousands of dollars. How To Appeal Your IRS Audit