90-Day Letter

1040A Form

DEFINITION of the 90-day letter

The 90 day letter is an IRS notice stating that there was a discrepancy or error in an individual’s taxes and they will be assessed unless requested. The taxpayer has 90 days to respond, otherwise the deficiencies in the audit will result in a reassessment. Also known as a deficiency notice.

DISTRIBUTION 90-day letter

Once you have received your notice, you have 90 days (150 days if the notice is addressed to a person outside the country) from the date of the notice to file an application with the Court. of tax, if you wish to contest the proposed IRS tax, according to the agency. These notices are generally sent after or audit, in the case of people who do not file an income tax return or who have unreported income.

Service of notice

If you do not dispute the accuracy of the Internal Revenue Service assessment, you will not need to change your tax return unless you have additional income, expenses or credits that you wish to report. . In this case, simply sign Form 5564, Notice of Deficiency – Waver and return it to the IRS, with a check attached, to avoid additional interest and / or penalties.

If you agree with the conclusions but have additional income, expenses or credits to claim, it will be necessary to modify your original income tax return with Form 1040-X. You can do this through your online tax preparation service or your tax professional or fill out the form yourself.

It becomes more complicated if you do not agree with the IRS findings. If you believe the IRS notice is incorrect, incomplete, or otherwise wrong, you can contact them with additional information that will shed light on the matter. You have 90 days from the date of the notice to dispute the claim. You can ask the Tax Court to reassess or correct or eliminate the liability proposed by the shortfall notice. During the 90 days and any period during which the matter is re-examined, the IRS cannot assess or collect your account.

Many taxpayers use a tax specialist or lawyer to manage the dispute resolution process if the amount involved is large.

If you lose the call and don’t pay or can’t pay, the government can file a federal tax lien on your salary, personal property or bank account. It is a claim against the assets, not their seizure. This happens when a federal tax levy occurs and the IRS actually forecloses on your property. Payment plans can also be developed to avoid liens and foreclosure.

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