IRS Notice: 30-Day vs 90-Day Letter

Why did I Receive a Letter from the IRS?

Receiving a letter in the mail from the Internal Revenue Service (IRS) is a nerve-wracking experience for most of us. This is because we expect the worst, when there is often no reason to panic. IRS letters to taxpayers serve purposes specific to each person’s present situation. A letter could be as simple as a request for more information or a notification of changes to your federal tax account.   Generally speaking, a letter from the IRS has to do with your tax return. Yes, a notice can require you to pay the IRS if you owe tax money to the governmental agency. But remember that the IRS operates on a case by case basis. You need not draw any conclusions until you know what the letter is about. Just because you may have owed money in the past does not mean that a new letter in the mail will expect the same of you or address similar circumstances.

How to Understand a Letter from the IRS

What you can be sure of is that you should take action, no matter what the letter contains. Start by understanding your IRS notice or letter. Open the letter and read the letter through, so you can determine the purpose of this particular IRS letter.   If the IRS is contacting you to notify you of a correction on your tax return, you will want to review the information and cross-reference your original return for the current tax year. You will then have an educated position from which you can decide whether you agree or disagree with what the IRS is telling you.

How to Respond to a Letter from the IRS

Find out if you are even expected to respond to the notice. In some cases, there is no need to contact the IRS if you agree with the changes detailed in the letter. However, if you disagree with the information presented in the letter, you will need to contact the IRS as soon as possible. Putting off a correspondence with the IRS is never a good idea, as the information disclosed in these letters are often time-sensitive.  

Contact the IRS by Mail

The most effective way to contact the IRS is by mail. If you disagree with the IRS notice, send a letter making your case. You will also need to include the tear-off section of the notice plus any pertinent documents for the IRS to understand your position. It is routine to give the IRS 30 days to reply to your claim.   Note that it is always a good idea to keep a record of your correspondence with the IRS. Make copies of the letters you have received and written for your files.

Contact the IRS by Phone

Calling often yields extensive hold time, but if you must call use the phone number in the upper-right hand corner of the letter you’ve received from the IRS. Be prepared for what the IRS may need to know from you before you get on the phone. You will want to have handy your tax return and the IRS notice you are calling about.

IRS 30 Day Letter: Notice for Acceptance or Appeal

In the event that you have undergone an IRS audit, you should expect to receive a 30-Day letter from the IRS at the completion of your audit. 

What is a 30-Day Letter from the IRS?

A 30-Day letter from the IRS, also known as the pre-assessment letter or CP22E, is an official statement relating the results of your audit and informing you of a deficiency with your tax payments. What does deficiency mean? It means that you have underpaid your taxes. It also includes next steps in order to get in good standing with the IRS. A 30-Day letter will outline how much you owe the IRS. Aptly named, a 30-Day letter must be responded to within 30 days.

Why did I receive a 30-Day Letter from the IRS?

You received a 30-Day letter from the IRS because they’ve audited your taxes and believe that you have not paid your taxes in full, resulting in a deficiency.    A package from the IRS will be delivered to you in the weeks following the conclusion of the audit. The IRS will send you:
  • An IRS 30 Day letter known as a Notice for Acceptance or Appeal
  • A document outlining the auditor’s demands or proposed changes
  • An agreement form or waiver
  • A copy of IRS Publication 5, which explains how to pay taxes, including withholding and estimated taxes
  The ball is now in your court to either accept or dispute the suggested changes.

How to Respond to a 30-Day Letter from the IRS

As the name suggests, you have 30 days from the date of a 30 day letter to respond. Depending on whether you decide to accept or appeal, the notice will clearly explain the courses of action available to you at this time. You may either: 
  • Agree to what the IRS is proposing. In this case, you’ll need to sign the consent page and mail it along with your payment to the IRS. 
  • Disagree with what the IRS is proposing. If you do, you must compose an argument, complete with evidence, and deliver it to the IRS by mail, fax, or phone. 

IRS 90 Day Letter: Notice of Deficiency

All notices are not created equal. If you fail to respond to the 30-Day letter, or if you do not make arrangements with an Appeals Officer, the IRS will send you a 90-Day notice of deficiency

What is a 90-Day Letter from the IRS?

A 90-Day Letter, also known as the IRS Notice CP2319A: Notice of Deficiency and Increase in Tax, is a follow-up letter from the IRS regarding your tax deficiency. It is an additional notice informing you of additional income tax that you owe, as well as any penalties or interest that it has incurred. (Wondering how to appeal a tax penalty?)

Why did I receive a 90-Day Letter from the IRS? 

You should only receive a 90-Day letter from the IRS if you did not properly address the results of your audit as outlined in the 30-Day Letter. If you believe that you did address the 30-Day letter and received the 90-Day letter in error, you must contact the IRS immediately. 

How to Respond to a 90-Day Letter from the IRS 

A statutory notice of deficiency is no laughing matter and should be dealt with within the enforced timeframe: 90 days for a response from the day of the letter if you are in the United States and 150 days if the IRS reaches you at an address outside of the territory.   If you don’t dispute the information included in the 90-Day letter, then responding is very simple. Write a check to the IRS in the amount that you owe, including the interest and penalties that you have incurred, and send it back to the IRS promptly.    If you wish to dispute the claims found in an IRS 90-Day letter, the IRS notice of deficiency gives you 90 days to file a petition with the Tax Court. If this is a path you wish to take, you may want to seek tax audit representation. These issues can quickly become complicated and, if you are feeling lost, confused, or worried, you should consider hiring an attorney, tax advocate or tax professional. They can act as your Sherpa and navigate you to a successful agreement with the IRS.