If you and IRS disagree on the tax you owe, IRS must file a notice of deficiency in Tax Court before it can collect. If no petition is filed in Tax Court, the tax IRS says you owe is generally deemed to be correct as a matter of law. We will file the petition and argue your case.
Thus, IRS asserts that your return shows a Deficiency in the tax you owe. The taxpayer may appeal the decision within IRS. If you disagree with the IRS’s assertion of a deficiency and are unable to resolve it within IRS, the IRS will issue you statutory notice of deficiency.
The notice will be sent to your last known address by certified mail. Be sure to pick it up promptly and read carefully the report of the revenue officer who adjusted the amount of tax that IRS claims is due.
The notice will state that if you disagree with the amount of additional tax IRS claims that you owe as set forth in the IRS report attached to the notice, you have 90 days from the date of the notice to file a petition in the United States Tax Court. Rather than starting what could be a days counting game, the notice will clearly state in the top right hand corner the date by which the petition must be filed. At this stage, the IRS assertion of a deficiency in tax against you is simply IRS’s claim. It is not an assessment that requires payment. If, however, you fail to file a petition in Tax Court on or before the date stated in the notice of deficiency, IRS’s proposed adjustment to your tax becomes the amount you owe and can be assessed.
The purpose of filing a petition in the United States Tax Court is to get the Court’s review of the adjustment to your tax that IRS is proposing. In Tax Court, you can dispute deficiencies asserted by IRS under income, estate and gift, and certain employment and excise tax provisions.