Legal Definitions - ninety-day letter

Definition: A notice of a tax deficiency sent by the IRS to a taxpayer, giving them 90 days to either pay the taxes or challenge the deficiency in tax court. This notice is also known as a notice of deficiency, deficiency notice, or tax-deficiency notice. If the taxpayer does not respond within the 90-day period, the IRS can begin collection actions.

For example, if a taxpayer receives a ninety-day letter stating that they owe $5,000 in back taxes, they have 90 days to either pay the amount owed or challenge the deficiency in tax court. If they do not respond within the 90-day period, the IRS can begin collection actions, such as garnishing wages or seizing assets.

Another example would be if a taxpayer receives a ninety-day letter but believes that the IRS made an error in their calculations. In this case, the taxpayer can challenge the deficiency in tax court and provide evidence to support their claim.

These examples illustrate how a ninety-day letter works and the options available to taxpayers who receive one.