Notice Of Deficiency

AAA

DEFINITION of 'Notice Of Deficiency'

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 EXPLAINS 'Notice Of Deficiency'

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 TERMS
  1. Field Audit

    An audit is an investigation conducted by the Internal Revenue ...
  2. Tax Planning

    Logical analysis of a financial situation or plan from a tax ...
  3. Tax Evasion

    An illegal practice where a person, organization or corporation ...
  4. Tax Liability

    The total amount of tax that an entity is legally obligated to ...
  5. Internal Revenue Service - IRS

    A United States government agency that is responsible for the ...
  6. Tax Avoidance

    The use of legal methods to modify an individual's financial ...
RELATED FAQS
  1. How do I calculate my effective tax rate using Excel?

    Your effective tax rate can be calculated using Microsoft Excel through a few standard functions and an accurate breakdown ... Read Full Answer >>
  2. How important are contingent liabilities in an audit?

    Contingent liabilities, when present, are very important audit items because they normally represent risks that are easily ... Read Full Answer >>
  3. Why are some spin-offs taxable and some are tax-free?

    The manner in which a parent company structures the spinoff and divests itself of a subsidiary or division determines whether ... Read Full Answer >>
  4. What is the difference between income tax and capital gains tax?

    The conceptual difference between income tax and capital gains tax is that income tax is the tax paid on income earned from ... Read Full Answer >>
  5. What is the optimal level of withholding tax to enter on my W-4?

    Most workers in the United States have part of their income withheld from each paycheck. This step is required by the federal ... Read Full Answer >>
  6. How can I calculate my withholding tax rate?

    Your withholding tax rate is estimated by your employer, who relies on the information on your Form W-4. How you fill out ... Read Full Answer >>
Related Articles
  1. Taxes

    How To Appeal Your IRS Audit

    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.
  2. Taxes

    Surviving The IRS Audit

    Keeping thorough records and knowing the penalties make this experience easier than you'd expect.
  3. Taxes

    3 Common Tax Questions Answered

    We clarify some rules that often puzzle taxpayers.
  4. Options & Futures

    When You Can't Pay Uncle Sam

    If you can't pay your taxes, there are some steps you can take to protect yourself. Discover your options here.
  5. Taxes

    Corporate Tax Rates: The Highs and the Lows

    The United States is No. 2 in the world for its high corporate tax rate. There are ways around paying it, and many nations with lower rates are worse off.
  6. Taxes

    Are Taxes the Solution for Income Inequality?

    Income inequality continues to increase. Why? And are taxes the solution?
  7. Taxes

    How The IRS Catches Tax Cheats & Liars

    When civil and criminal penalties don't deter people from skipping out on their taxes, the IRS has other tools it can use.
  8. Taxes

    OK, So I'll Be Smarter Next Tax Time

    5 tax resolutions to start on right now for a smoother tax return next April 15.
  9. Taxes

    What To Do If You Lost Your W-2

    There's no need to panic if you don't have your Form W-2 to file taxes, there are easy ways to gain access to the missing form or file without it.
  10. Taxes

    Will Itemized Deductions Get You A Bigger Refund?

    April and taxes are due soon. If you need to file your return, you might have to decide if itemizing your deductions this year will net you a better deal.

You May Also Like

Hot Definitions
  1. Unlevered Beta

    A type of metric that compares the risk of an unlevered company to the risk of the market. The unlevered beta is the beta ...
  2. Moving Average - MA

    A widely used indicator in technical analysis that helps smooth out price action by filtering out the “noise” from random ...
  3. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  4. Productivity

    An economic measure of output per unit of input. Inputs include labor and capital, while output is typically measured in ...
  5. Variance

    The spread between numbers in a data set, measuring Variance is calculated by taking the differences between each number ...
  6. Terminal Value - TV

    The value of a bond at maturity, or of an asset at a specified, future valuation date, taking into account factors such as ...
Trading Center