If the IRS sent you a letter titled "Notice of Deficiency," usually by certified mail, you are holding the most important deadline in the federal tax system. People call it the 90-day letter. It says the IRS has decided you owe more tax, and it gives you a fixed window to take that decision to the United States Tax Court.
Miss the window and the IRS assesses the tax. The fight does not become impossible, but it becomes much harder and much more expensive. Here is what the letter means and what to do with it today.
What the 90-day letter is
Under Internal Revenue Code section 6212, when the IRS determines a deficiency in income, estate, gift and certain excise taxes, it is authorized to send a notice of deficiency by certified or registered mail. Section 6212(a) also requires the notice to tell you about your right to contact a local office of the Taxpayer Advocate, with its location and phone number.
The letter usually follows an audit, an exam report you did not agree with, or an automated mismatch between your return and information the IRS received. It is the IRS's formal, final determination at that stage. Phone calls and letters to the examiner do not stop the clock.
The deadline: 90 days, or 150 days
Section 6213(a) gives you 90 days after the notice is mailed to file a petition with the Tax Court. If the notice is addressed to a person outside the United States, the period is 150 days. If the last day falls on a Saturday, Sunday or a legal holiday in the District of Columbia, it is not counted as the last day.
Look on the first page of the letter for the date labeled as the last day to file a petition with the Tax Court. That date matters. Section 6213(a) says a petition filed on or before the last date the IRS specifies in the notice is treated as timely. Count from the mailing date, not the day you opened the envelope, and do not wait until the final week.
Why this window protects you
While the period is open, section 6213(a) generally bars the IRS from assessing the deficiency or levying to collect it. If you file a timely petition, that bar continues until the Tax Court's decision becomes final. That is the main reason the 90-day letter is so valuable: the Tax Court is the one forum where you can dispute the tax without paying it first.
If you do not petition in time, section 6213(c) provides that the deficiency is assessed and must be paid on notice and demand. Then the normal collection process starts: balance due notices, and eventually a final notice of intent to levy.
What to do right now
- Find the last day to petition and write it down. Put it on your calendar with reminders two weeks out and one week out. If anyone in your household opened the letter late, the deadline did not move.
- Keep the envelope. The postmark and certified mail information can matter later if there is any question about when or where the notice was mailed.
- Read the explanation pages. The notice includes a statement showing each adjustment the IRS made. Mark which ones you agree with and which you do not. You can concede some items and contest others.
- Gather your proof. Pull together the return, receipts, bank records, forms and any correspondence from the audit. The Tax Court case is about whether the IRS got the numbers right, so evidence matters.
- Decide whether to petition. If you disagree with any part of the deficiency, filing a petition preserves your rights. If you agree with all of it, you can sign the waiver form that comes with the notice and work on payment options instead.
- File the petition with the Tax Court, not the IRS. The petition goes to the United States Tax Court. Sending your objections to the IRS address on the letter does not count as a petition. The Tax Court's website explains its filing options and forms.
- Consider whether to elect a small tax case. See the next section.
The small tax case option
Section 7463 lets taxpayers choose simplified small tax case procedures, often called an "S case," when the amount of the deficiency placed in dispute (including additions to tax and penalties) does not exceed $50,000 for any one taxable year. The procedures are less formal, which many people find easier.
There is a trade-off. Under section 7463(b), a decision in a small tax case cannot be appealed to any other court and is not precedent for other cases. If your case involves a legal issue you may want to take further, regular procedures may be the better choice. You can also ask the court to discontinue small case procedures before the decision becomes final, subject to the court's approval.
Appeals and the Taxpayer Advocate
Filing a petition does not mean you are headed straight to trial. The IRS Independent Office of Appeals considers Tax Court docketed cases, and the Internal Revenue Manual (IRM 8.4.1.2) says Appeals strives to resolve as many docketed cases as possible before trial. Petitioning keeps the court deadline protected while those settlement conversations happen.
The Taxpayer Advocate Service, whose contact information the notice must include under section 6212(a), can help when you are facing a hardship or an IRS process is not working. Contacting the Advocate does not extend the 90-day deadline. Treat it as help alongside the petition, not a replacement for it.
If you already missed the deadline
The Tax Court generally cannot hear a deficiency case when the petition was late. That leaves harder routes:
- Pay and sue for a refund. You can generally pay the tax, file a refund claim with the IRS, and if it is denied or not acted on, sue in a federal district court or the Court of Federal Claims under 28 U.S.C. section 1346(a)(1). Section 6532(a) says that suit generally cannot begin until six months after you file the claim, unless the IRS decides it sooner, and must be brought within two years after the IRS mails a notice of disallowance.
- Ask for audit reconsideration. If you have new information the IRS never considered, the IRS may reopen the assessment administratively. It is discretionary, not a right.
- Raise the liability in a collection hearing, in limited cases. Section 6330(c)(2)(B) allows a challenge to the underlying liability at a collection due process hearing only if you did not receive a notice of deficiency or did not otherwise have an opportunity to dispute it. If you received the 90-day letter and ignored it, this door is generally closed.
What not to do
- Do not call the IRS and assume that stops the clock. Only a timely petition to the Tax Court protects your right to go there.
- Do not mail your petition to the IRS. It goes to the Tax Court.
- Do not ignore the letter because you think you cannot afford a fight. The small tax case procedure exists so ordinary people can be heard.
- Do not sign the waiver if you disagree. Signing agrees to immediate assessment of the amount you consent to.
- Do not wait for the last day. Filing problems happen. Give yourself room.
Getting help before the window closes
The 90-day letter is one of the few IRS deadlines that no phone call can fix. If the date is close, or you are not sure whether to petition, talk to a tax attorney who appears in Tax Court before the deadline, not after. You can reach our office through GetIRSHelp.com or by calling (813) 229-7100. For the other dates you should be tracking, see IRS deadlines you cannot miss.
Frequently asked questions
How long do I have to respond to an IRS notice of deficiency?
Under section 6213(a) of the Internal Revenue Code, you have 90 days after the notice is mailed to petition the Tax Court, or 150 days if the notice is addressed to someone outside the United States. A petition filed by the last day printed on the notice is treated as timely.
Can the IRS collect while my Tax Court case is pending?
Generally no. Section 6213(a) bars assessment and levy for the deficiency during the 90-day or 150-day period and, if you file a timely petition, until the Tax Court decision becomes final. Exceptions exist for jeopardy and termination assessments.
What is a small tax case in Tax Court?
Under section 7463, you can elect simplified procedures if the deficiency in dispute, including additions to tax and penalties, is $50,000 or less for any one year. The decision cannot be appealed and is not precedent for other cases.
What happens if I miss the 90-day deadline?
The IRS assesses the tax and begins collection. You generally lose the ability to go to Tax Court on the deficiency. Remaining options include paying the tax and filing a refund claim, which can lead to a suit in federal district court or the Court of Federal Claims, or asking the IRS for audit reconsideration.
Does calling the IRS or the Taxpayer Advocate extend the deadline?
No. Conversations with the IRS, Appeals or the Taxpayer Advocate Service do not extend the time to petition the Tax Court. Only a timely petition filed with the court preserves that right.
This guide is general information, not legal advice. Tax law changes and every case turns on its own facts.