The IRS 90-Day Letter: Five Mistakes That Can Cost You Your Day in Tax Court
When most people receive a Statutory Notice of Deficiency, their first thought is, “How am I going to pay this?”
That may be the wrong question.
A Statutory Notice of Deficiency, commonly known as the 90-Day Letter, is often referred to as your “ticket to the United States Tax Court.” It gives you the right to challenge the IRS’s determination before the additional tax is generally assessed.
Unfortunately, many taxpayers lose that right by making a few common mistakes.
Mistake #1: Assuming the IRS Is Always Right
The IRS believes additional tax is owed, but that doesn’t automatically make its determination correct.
The issue may be missing documentation, misunderstood facts, or information the IRS never received. Before accepting the proposed changes, understand exactly why the IRS believes you owe more tax.
Mistake #2: Ignoring the 90-Day Deadline
The notice is commonly called the 90-Day Letter because, in most cases, you have only 90 days from the date it is mailed to file a petition with the United States Tax Court.
Miss that deadline, and your ticket to Tax Court may expire.
Mistake #3: Believing a Phone Call Stops the Clock
Many taxpayers call the IRS to explain their situation or send additional information.
While those conversations may be helpful, they generally do not extend the deadline for filing a Tax Court petition.
Protect your rights first, then continue working to resolve the dispute.
Mistake #4: Looking Only at the Amount Owed
A large proposed tax bill can be overwhelming, but the key is understanding how the IRS arrived at that number.
Review the notice carefully. Determine what income was added, which deductions were disallowed, and whether the IRS overlooked information that supports your position.
Sometimes the issue is much smaller than the number printed on the first page.
Mistake #5: Waiting Too Long to Get Help
Evaluating an IRS examination takes time. Records may need to be gathered, documents reviewed, and options considered.
The earlier you understand your rights, the more choices you generally have.
Waiting until the last week before the deadline often limits those choices.
A Former IRS Perspective
As a former IRS Agent, I’ve seen taxpayers lose valuable rights simply because they misunderstood the importance of this notice.
The Statutory Notice of Deficiency isn’t just another IRS letter. It is your ticket to the United States Tax Court and one of the most important procedural protections available to taxpayers.
Don’t let that ticket expire before you understand your options.
The Bottom Line
A 90-Day Letter doesn’t automatically mean you owe the additional tax.
It means the IRS has made its determination, and now it’s your turn to decide whether you agree.
Understand the proposed changes, protect your deadline, and make an informed decision before your rights are lost.
If you’ve received a Statutory Notice of Deficiency and aren’t sure what to do next, we’re here to help.
Visit www.TaxReliefHawaii.com to learn more.
About the Author
David M. Ramirez, EA, JD, MST, USTCP, NTPI Fellow, CTRC, is a former IRS Agent, national speaker, and author with more than 25 years of experience helping individuals and businesses resolve IRS tax problems. He is the President of Tax Relief Services and focuses his practice on IRS examinations, collections, appeals, and tax controversy matters.
Disclaimer: This article is for general educational purposes only and is not legal or tax advice. Every taxpayer’s situation is different. Consult a qualified tax professional regarding your specific circumstances.
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