Statutory Notice of Deficiency
Taxpayers who do nothing in response to a pre-assessment letter will receive a Statutory Notice of Deficiency, commonly referred to as a 90-Day Letter. A taxpayer also will receive a Statutory Notice of Deficiency if he does not agree to the findings of the Office of Appeals following a protest. § 6212.
The 90-Day Letter that is a Statutory Notice of Deficiency should not be confused with other 90-day letters, including the one required when innocent spouse relief is denied. § 6015.
The statutory notice of deficiency grants the taxpayer 90 days within which to petition the Tax Court to re-determine the liability that is proposed by the examining agent. If the issue involves filing status and if the taxpayer was married during the year in question but did not file a joint return, consider having the taxpayer file a joint return before the petition is filed. See IRC § 6013(b)(2)(B). Once a petition is filed, a joint return is no longer permitted to be filed.
Because the 90-day period is prescribed by statute, it cannot not be extended. For this reason and to preserve the rights of the client, it is extremely important not to miss the 90-day deadline. If a student overlooks this time limit he or she may receive a failing grade in the clinic course.
The 90-day period within which a petition may be filed is counted from the date the notice of deficiency is mailed to the taxpayer’s last known address. The IRS is required by law to include on the notice the last day a petition may be filed. IRC § 6213. During the 90-day period, the IRS is barred from any assessment or collection activity. If taxpayer files a petition, this continues until a Tax Court decision is final. IRC § 6503(a)(1). Failure to file a petition with the Tax Court will result in the deficiency being assessed. This is one of the steps the IRS takes before collection efforts begin.
Internal Revenue Code
|IRC §6212||Notice of Deficiency|
|IRC §6213||Restrictions applicable to deficiencies; petition to Tax Court|
|IRC §6503||Suspension of Running off Period of Limitation|