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Ninety-Day Letter

tax taxpayer deficiency court

The name given to a written notice sent to a taxpayer by the INTERNAL REVENUE SERVICE regarding a deficiency in the payment of tax (26 U.S.C.A. § 6212 et seq.).

The ninety-day letter, also known as the statutory notice of deficiency, suspends the running of the STATUTE OF LIMITATIONS regarding tax assessment for ninety days. During the ninety days following the mailing of a ninety-day letter, the taxpayer may consent to the assessment and pay the tax but later seek a refund in U.S. district court. If the taxpayer disputes the assessment or refuses to pay the additional amount, he or she may challenge the deficiency by filing a petition with the U.S. Tax Court. The ninety-day letter, sent by certified or registered mail, gives the taxpayer an opportunity to challenge an alleged deficiency before paying it. If the taxpayer neither pays the tax nor files a TAX COURT petition within the ninety-day period, the additional tax liability may be assessed promptly.

For taxpayers who reside outside the United States, the time period is extended to 150 days.

CROSS-REFERENCES

Taxation.

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