What is a Notice of Deficiency?
A Notice of Deficiency is a formal written letter by the IRS indicating that they believe you owe additional income tax. This letter is sent after the IRS reviews tax returns and determines that the amount of tax reported doesn’t match with their records. This notice officially informs you of the discrepancy and potential tax liability.
Receiving this notice is important because it starts a 90-day period in which you have the right to dispute the IRS’s claim by filing a petition. Failing to respond within the timeframe, you will lose the chance to contest the additional tax assessment before it becomes final.
Why Did I Receive a Notice of Deficiency?
You received a Notice of Deficiency because the IRS determined that there is unmatching income and deductions you reported on your tax returns and the information the IRS has on file. In other words, you might owe more tax than you initially reported.
What is the CP3219 Notice?
The CP3219 is the Notice of Deficiency.
What’s My Next Step After Receiving the Notice of Deficiency?
After receiving the Notice of Deficiency or CP3219, your next step should be to carefully review the notice. It is important to understand the IRS’s perspective on what you owe and why. If you agree with the proposed tax owed balance, the next steps are straightforward: sign and return the notice to arrange payment approach for the open balance.
However, if you disagree, your response should be within the 90-day window provided from the date of the notice. Your first step is to file a petition with the tax court to formally dispute the IRS’s claim. Acting promptly and understanding your rights and responsibilities are crucial.