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IRS Notice of Deficiency


Notice of Deficiency is an official notice from the IRS that is sent to you via certified mail, return receipt requested. This is a very important document that should not be ignored in any fashion. The Notice of Deficiency tells you that the IRS has determined that you have additional unpaid tax liabilities, including penalties and interest, and that the IRS plans to assess these unpaid taxes against you. The IRS can also issue a Notice of Deficiency in the event you have not filed a tax return for one or more years.

If the amount listed in the Notice of Deficiency is small enough, you may decide to pay the alleged deficiency, thereby resolving your IRS problem. However, if the amount listed on the Notice of Deficiency is incorrect, a Petition, which is another name for a lawsuit, can be filed against the IRS in the United States Tax Court.

There are two types of Petitions that can be filed against the IRS in the United States Tax Court, an “S” case or a regular case. If the proposed liability including penalties (but not including interest) is $50,000.00 or less for each year, and if it is a deficiency case, then you can elect to have your case treated as a small tax case, also known as an “S” case. If your case is a collection case, the total unpaid tax liability, including penalties and interest, for all years cannot exceed $50,000.00 if you want your case to be treated as an “S” case. “S” cases are less formal than regular cases and the Federal Rules of Evidence are more relaxed. However, there is no right to Appeal any adverse decision in an “S” case. If the proposed liability does not meet the “S” case criteria, or if you would prefer to have the opportunity to Appeal any adverse decision, you can choose to have your case heard as a regular case before the United States Tax Court.

A Notice of Deficiency requires the filing of a Petition in the United States Tax Court within 90 days of the date listed on the Notice of Deficiency. Because the United States Tax Court is a legislative court as opposed to a constitutional court, the jurisdiction of the United States Tax Court is strictly limited to that 90 day period. If you do not timely or properly file a Petition in the United States Tax Court within the 90 day period, the United States Tax Court cannot hear your case.

If you have received a Notice of Deficiency from the IRS, please immediately call Patrick T. Sheehan & Associates. When he was an attorney for the IRS, Mr. Sheehan regularly represented the United States government in the United States Tax Court. Since leaving the government in 1991, Patrick T. Sheehan & Associates has successfully represented many taxpayers before the IRS in the United States Tax Court.

If you have received a Notice of Deficiency from the IRS, immediate action is required. Patrick T. Sheehan & Associates stands ready to assist with your Notice of Deficiency. Call Us Before the IRS Calls You!®

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Chicago Area Tax Attorneys

Chicago Area Tax Attorneys

314 North York Road
Elmhurst, IL 60126

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