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 Liability

    The total amount of tax that an entity is legally obligated to ...
  4. Tax Evasion

    An illegal practice where a person, organization or corporation ...
  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 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

    Taxes: H&R Block Vs. TurboTax Vs. Jackson Hewitt

    There are more and more tax services to help ease the pain of filing income taxes. Here's our take on three of the biggest.
  6. Taxes

    Filling Out Form 4562: Investopedia Explains

    Step-by-step, how to fill out the depreciation and amortization form for your business tax return.
  7. Taxes

    Before You Visit Your Tax Preparer: Do This

    The earlier you start preparing your tax records and documents, the more likely you are to have a smooth tax return experience โ€“ and all the tax benefits you're due.
  8. Taxes

    5 Smart Uses For Your Tax Refund

    Consider using the bulk of your refund to take care of long-term needs, like saving for retirement or college.
  9. Taxes

    Top 10 Tax Filing Mistakes โ€“ And How To Avoid Them

    What are the worst tax filing mistakes people make? Tax expert and attorney Barbara E. Weltman points out 10 common ones โ€“ and how to steer clear of them.
  10. Entrepreneurship

    10 Tax Benefits For The Self-Employed

    Running your own business has both personal and financial perks.

You May Also Like

Hot Definitions
  1. Fixed-Charge Coverage Ratio

    A ratio that indicates a firm's ability to satisfy fixed financing expenses, such as interest and leases. It is calculated ...
  2. Efficiency Ratio

    Ratios that are typically used to analyze how well a company uses its assets and liabilities internally. Efficiency Ratios ...
  3. Fixed Cost

    A cost that does not change with an increase or decrease in the amount of goods or services produced. Fixed costs are expenses ...
  4. Subsidy

    A benefit given by the government to groups or individuals usually in the form of a cash payment or tax reduction. The subsidy ...
  5. Sunk Cost

    A cost that has already been incurred and thus cannot be recovered. A sunk cost differs from other, future costs that a business ...
  6. Technical Skills

    1. The knowledge and abilities needed to accomplish mathematical, engineering, scientific or computer-related duties, as ...
Trading Center