A 90-day letter determines a deficiency in an income or estate and gift tax liability. The IRS can issue this notice under Sec. 6212(a). If a taxpayer receives this notice, there is a 90-day window from the date of the notice to either agree to the adjustments or file a petition.
Most deficiencies are resolved without a 90-day letter. However, if a notice needs to be sent it will include a letter explaining its purpose, amount, and how the amount was computed. For a statutory notice of deficiency there must be a proposal deficiency with which the taxpayer does not agree. One of the following criteria also needs to be met:
- The statute of limitation on assessment is imminent, and no extension can be obtained;
- The taxpayer does not respond to, or file a valid protest to, a 30-day letter;or
- The taxpayer asks for the notice to petition the case to the Tax Court.
With every issue, the government’s position must be explained in the notice of deficiency. The purpose of the notices is to explain what provisions the government is relying on and how it will be defended in the Tax Court.
If taxpayers filed a joint return, a copy of the notice will be sent to each at their last known address. For an estate tax deficiency, the notice is mailed to the fiduciary if a notice of fiduciary relationship has been filed, or, in the absence of such a notice, the last known address of the decedent or other person subject to the liability.
Instructions on how to contact the Tax Court for filing rules and the deadline for filing a petition can be found on the cover letter of this notice. It is important to keep track of the 90-day deadline because the court will not consider untimely filed petitions.
To find out how we can help you make an appointment with us at 401-254-0151. We look forward to hearing from you.