IRS Notice of Deficiency

IRS Notice of Deficiency refers to a formal notification issued by the Internal Revenue Service (IRS) to taxpayers when the IRS believes that there is a discrepancy in the taxpayer’s return that results in an underpayment of taxes owed.

The notice provides details on the specific adjustments made to the taxpayer’s return, including the reasons for the adjustments and the amount of tax owed. Taxpayers typically have 90 days from the date of the notice to respond either by paying the amount due or by filing a petition with the U.S. Tax Court to contest the IRS’s findings. If no action is taken, the IRS may assess the additional tax and take collection actions.