Written by attorney Henry Daniel Lively

What are my options if I receive a 90 day letter from the IRS?

A 90 day letter, or a Statutory Notice of Deficiency, is a letter that you receive from the IRS that proposes a tax deficiency against you. Once you receive this letter your options are limited. The letter states that you have two options. You can either pay the tax as indicated or file a petition with the U.S. Tax Court. This letter is actually your ticket into the Tax Court. It is the only time that you will be allowed to petition the Court. This is important because you can actually argue your position without having to pay the tax first. After the 90 says are up you will have to pay the tax and sue for a refund in the U.S. District Court or Court of Claims.

Another option that you have is to ask for an audit reconsideration if you were audited, or talk to the auditor or their supervisor directly to discuss the letter. You may be able to provide additional information and convince the Service to adjust the letter to something that you can agree on and close your audit as an agreed matter.

If this does not work and you have not gone to Appeals with your matter, once the IRS assigns counsel to your case you can request to go to Appeals in an attempt to settle your matter. There will be other opportunities for settlement, but this is usually one of the best times to get the case settled.

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