How to Appeal a Notice of Deficiency and Other Types of Letters from IRS

by
Richard Fonfrias, J.D.
Chicago’s Financial Rescue & Bankruptcy Lawyer
Fonfrias Law Group, LLC

If you receive a letter or notice from the IRS, it will explain the reason for the correspondence and provide instructions. Many of these letters and notices can be dealt with simply, without having to call or visit an IRS office.

The notice you receive covers a very specific issue about your account or tax return. Generally, the IRS will send a notice if it believes you owe additional tax, deserve a larger refund, or if IRS has a question about your tax return or needs more information.

Notice of Deficiency (Letter 3219 SC/CG) — IRS

A Notice of Deficiency is sometimes referred to as a 90-day letter. The Notice of Deficiency tells you the tax IRS assesses plus the interest and penalties you owe. A Notice of Deficiency is required by law and is to advise you of your right to appeal to the U.S. Tax Court.

The letter also states that within 90 days, you must submit one of the following:
— Your Form 1040 completed and signed, including all schedules and forms with cover letter;
— The Consent to Assessment and Collection form, signed and dated; or
— A statement explaining why you believe you are not required to file, or information you would like the IRS to consider.

You No Longer Deal With the IRS

When IRS sends you a Notice of Deficiency, IRS no longer handles your case. Communicating with IRS is a waste of time because IRS no longer has jurisdiction over your case.

At this point, you can do one of two things:

1. You can pay the tax — or

2. You can challenge IRS’s tax assessment by filing a case in U.S. Tax Court. If the tax assessment against you is under $50,000, then you can represent yourself and file a Small Tax Case. In a Small Tax Case, you can act as your own attorney and go up against the IRS in court. However, you’re in a much stronger position when you hire a tax attorney to represent you.

Additional IRS Letters and Notices Offering an Appeal

Examination Letters

Letter 525 – General 30-Day Letter

This letter accompanies a report giving you proposed adjustments to your tax return. It tells you the action you can take if you do not agree with the proposed adjustments. The letter explains that if you agree with the adjustment, then you simply sign and return the agreement form. If you do not agree, then you can submit a request for appeal/protest to the office/individual who sent you the letter. The letter or referenced publications explain how to file a protest. You need to file your protest within 30 days from the date of this letter in order to appeal the proposed adjustments with the Office of Appeals.

Letter 531 – Notice of Deficiency

This letter is notice of the Commissioner’s determination that you owe additional tax or other amounts for the tax year(s) identified in the letter. The Internal Revenue Code authorizes the Commissioner to send this notice. The letter explains how to dispute the adjustments if you do not agree. To dispute the adjustments without payment, you file a petition with the Tax Court within 90 days from the notice date.

Letter 692 – Request for Consideration of Additional Findings

This letter accompanies a report giving you proposed adjustments to your tax return. It tells you the action you can take if you do not agree with the proposed adjustments. The letter explains that if you agree with the adjustment, then you simply sign and return the agreement form. If you do not agree, then you can submit a request for appeal/protest to the office/individual who sent you the letter. The letter or referenced publications explain how to file a protest. You need to file your protest within 15 days from the date of this letter in order to appeal the proposed adjustments with the Office of Appeals.

Letter 915 – Letter to Transmit Examination Report

This letter explains adjustments in the amount of tax you owe. The letter explains that if you agree with the adjustment, then you simply sign and return the agreement form. If you do not agree, then you can submit a request for appeal/protest to the office/individual who sent you the letter. The letter or referenced publications explain how to file a protest. You need to file your protest within 30 days from the date of this letter in order to appeal the proposed adjustments with the Office of Appeals.

Letter 950 – 30-Day Letter-Straight Deficiency or Over-Assessment

This letter is used for unagreed, straight deficiency, straight overassessment or mixed deficiency and overassessment field examination cases. This letter may be used for various types of tax. The letter explains that if you agree with the adjustment, then you simply sign and return the agreement form. If you do not agree, then you can submit a request for appeal/protest to the office/individual who sent you the letter. The letter or referenced publications explain how to file a protest. You need to file your protest within 30 days from the date of this letter in order to appeal the proposed adjustments with the Office of Appeals.

Letter 1153 – Trust Funds Recovery Penalty Letter

This letter explains that the IRS’s efforts to collect the federal employment or excise taxes due from the business named on the letter have not resulted in full payment of the amount owed. Therefore, the IRS proposes to assess a penalty against you. If you agree with this penalty for each tax period shown, then you are asked to sign Part 1 of the enclosed Form 2751 and return it to the office/person who sent you the letter. If you do not agree, then you can submit a request for appeal/protest to the office/individual who sent you the letter. The letter or referenced publications explain how you file a protest. You need to file your protest within 60 days from the date of the letter in order to appeal this decision with the Office of Appeals.

Letter 3016 – IRC Section 6015 Preliminary Determination Letter (30 Day)

This is a preliminary letter giving you 30 days to appeal the determination for innocent spouse relief under IRC Section 6015. The letter explains that if you do not agree with the determination, then you can submit a request for appeal/protest to the office/individual who sent you the letter. The letter explains how you file a protest. You need to file your protest within 30 days from the date of this letter in order to appeal the proposed adjustments with the Office of Appeals.

Letter 3391 – 30-Day Nonfiler Letter

This letter tells you that the IRS believes you are liable for filing tax returns for the periods identified in the letter. It includes a report giving you proposed adjustments to your tax return and explains the adjustments. The letter explains that if you agree with the adjustments, then you sign and return the agreement form. If you do not agree, then you can submit a request for appeal/protest to the office/individual who sent you the letter. The letter or referenced publications explain how to file a protest. You need to file your protest within 30 days from the date of this letter in order to appeal the proposed adjustments with the Office of Appeals.

Letter 3727 – 30-Day Letter Notifying Taxpayer No Change to Original Report Disallowing EIC Based on Failure to Meet Residency Test for Children Claimed

This letter explains why the IRS will not allow your earned income credit (EIC). The letter explains that if you agree with the adjustment, then you sign and return the agreement form. If you do not agree, then you can submit a request for appeal/protest to the office/individual who sent you the letter. The letter or referenced publication explains how to file a protest. You need to file your protest within 30 days from the date of this letter in order to appeal the proposed adjustments with the Office of Appeals.

Letter 3728 – 30-Day Letter Notifying Taxpayer No Change to Original Report Partially Disallowing EIC Based on Failure to Meet Residency Test for One Child

This letter explains why the IRS can give you only part of your earned income credit (EIC). The letter explains that if you agree with the adjustment, then you sign and return the agreement form. If you do not agree, then you can submit a request for appeal/protest to the office/individual who sent you the letter. The letter or referenced publication explains how to file a protest. You need to file your protest within 30 days from the date of this letter in order to appeal the proposed adjustments with the Office of Appeals.

Collection Letters

Letter 11 – Final Notice of Intent to Levy and Notice of Your Right to a Hearing

This letter is to notify you of your unpaid taxes and that the IRS intends to levy to collect the amount owed. The letter and referenced publications explain how to request an appeal if you do not agree. You need to file a Form 12153, Request for A Collection Due Process Hearing. Send it to the address shown on your levy notice within 30 days from the date of the letter in order to appeal the proposed action with the Office of Appeals.

Letter 1058 – Final Notice Reply Within 30 Days

Letter 1085 – 30-Day Letter Proposed 6020(b) Assessment

Letter 3172 – Notice of Federal Tax Lien Filing and Your Rights to a Hearing under IRC 6320

This letter is to notify you that the IRS filed a notice of tax lien for the unpaid taxes. If you do not agree, then you can request appeals consideration within 30 days from the date of the letter. The letter and publications explain how to request a hearing from Appeals. You need to file a Form 12153, Request for A Collection Due Process Hearing. Send it to the address shown on your lien notice within 30 days from the date of the letter in order to appeal the action with the Office of Appeals.

Notices

CP 90 – Final Notice of Intent to Levy

CP 90 notifies you of your unpaid taxes and that the IRS intends to levy to collect the amount owed. This notice and referenced publications explain how to request an appeal if you do not agree. You need to file a Form 12153, Request for A Collection Due Process Hearing. Send it to the address shown on your levy notice within 30 days from the date of the letter in order to appeal the action with the Office of Appeals.

CP 92 – Notice of Levy upon Your State Tax Refund

CP 92 notifies you that the IRS levied your state tax refund to pay your unpaid federal taxes. This notice and referenced publications explain how to request an appeal if you do not agree. You need to file a Form 12153, Request for A Collection Due Process Hearing. Send it to the address shown on your levy notice within 30 days from the date of the letter in order to appeal the action with the Office of Appeals.

CP 242 – Notice of Levy upon Your State Tax Refund

CP 242 notifies you that the IRS levied your state tax refund to pay your unpaid federal taxes. This notice and referenced publications explain how to request an appeal if you do not agree. You need to file a Form 12153, Request for A Collection Due Process Hearing. Send it to the address shown on your levy notice within 30 days from the date of the letter in order to appeal the action with the Office of Appeals.

CP 523 – IMF Installment Agreement Default Notice

CP 523 notifies you that the IRS intends to terminate your installment agreement in 30 days. You have the right to request an appeal if you do not agree by following the instructions in the notice.

CP 2000

You receive this letter when the IRS receives income, deduction or credit information that does not match your return. You are provided the proposed adjustments to your tax return based upon this information. If you agree, then you simply sign and return the agreement forms. If you do not agree, then you can submit a request for appeal/protest to the office/individual who sent you the letter. The letter explains how to file a protest. You need to file your protest within 30 days from the date of this letter in order to appeal the proposed adjustments with the Office of Appeals.

As you can see, tax law is complicated. Understanding and deciphering Federal Tax law and State Tax law can be a challenging for the layman, as can successfully dealing with letters and notices from the IRS, such as a Notice of Deficiency. In Chicago, financial rescue and bankruptcy attorney, Richard Fonfrias can help you with deal with the IRS and any another tax problem that you might have, including removing IRS tax liens, removing State tax liens, tax reduction, tax lien help, filing late tax returns and settling back taxes.

How to Appeal a Notice of Deficiency and Other Types of Letters from IRS