Receiving a Notice of Deficiency from the Internal Revenue Service (IRS) can be an unsettling experience. Often referred to as a “90-day letter,” this notice is a formal statement from the IRS notifying you that there is a discrepancy in your tax return that leads to additional taxes owed. Understanding how to respond to this notice is crucial to managing the situation effectively and minimizing any additional financial burden.


A Notice of Deficiency is issued by the IRS when they determine that the amount of tax reported on a tax return is less than what the IRS calculates is owed. This notice provides you the right to challenge the IRS’s determination before the tax is assessed. Here’s what you need to know to navigate this process.

"IRS Notice of Deficiency"

Understanding the Notice of Deficiency

1. What is a Notice of Deficiency?

The Notice of Deficiency is a formal notice from the IRS that proposes a change to your income tax amount. It provides a detailed explanation of the difference between the amount reported on your return and what the IRS believes you owe.

Key Points:

2. Why Did You Receive This Notice?

You might receive a Notice of Deficiency for several reasons, including:

How to Respond to a Notice of Deficiency

1. Review the Notice Carefully

Examine the changes the IRS proposes. Understand each adjustment, why it was made, and how it affects your tax liability.

Key Points:

2. Decide How to Respond

You have a few options when responding to a Notice of Deficiency:

a. Agree with the Notice

If you agree with the IRS’s findings:

b. Disagree with the Notice

If you disagree with the IRS’s adjustments:

3. Understand the Timeline

The timeline is crucial when dealing with a Notice of Deficiency:

4. Consult a Professional

A tax professional can provide invaluable help:

5. Plan for Payment

If you end up owing additional tax:

Preventative Measures for the Future

  1. Keep Accurate Records: Maintain detailed and organized financial records to support your tax return.
  2. Understand Tax Laws: Stay informed about changes in tax laws that could affect your filings.
  3. Use Professional Tax Services: Consider using a tax professional, especially if your tax situation is complex.


Receiving a Notice of Deficiency is not the final word on your tax liabilities. By understanding the notice, exploring your options, and responding appropriately within the given timeline, you can effectively manage and often mitigate any additional taxes owed. Always remember, taking proactive steps and seeking professional advice can make navigating these challenges much smoother.