The Notice of Deficiency, or 90-day letter

What the notice actually is

A Notice of Deficiency is the formal determination that you owe more tax than you reported. It is issued under section 6212 of the Internal Revenue Code, and despite how it reads, it is not a bill. The IRS cannot assess or collect the amount shown while your window to petition remains open.

Practitioners call it the ticket to the Tax Court, and that is the most useful way to think about it. It is the document that gives you the right to have a judge look at the dispute before you pay anything. That right exists nowhere else in the federal tax system: every other route to a court requires paying the tax first and then suing for a refund.

It usually arrives after an examination that did not resolve, or after a CP2000 that went unanswered. Occasionally it is the first substantive letter someone receives, particularly where the IRS prepared a substitute return because none was filed.

How the 90 days is counted

The period runs from the date printed on the notice, not the day it arrived and not the day you opened it. Ninety calendar days, not three months. If the last day falls on a Saturday, Sunday, or legal holiday in the District of Columbia, it moves to the next business day.

If the notice is addressed to a person outside the United States, the period is 150 days instead.

A petition is treated as filed when it is properly mailed, not when the court receives it, provided it is postmarked within the period and sent to the correct address. Electronic filing through the court’s system is timestamped in the court’s time zone. Both routes work. What does not work is assuming the postmark is forgiving — it is not.

What filing a petition does

Filing suspends assessment and collection while the case is pending. That alone changes the situation: no levy, no lien arising from this liability, no enforced collection while the matter is before the court.

It also moves the case into a different posture. Once a petition is filed, the matter is typically referred to IRS Appeals or to Chief Counsel, and it is evaluated by people whose job includes weighing what would happen at trial. The great majority of petitioned cases settle without a trial. Filing is often what produces a serious conversation rather than a form letter.

You do not need to pay anything to petition, and you do not need to agree with all of the notice to dispute part of it.

What Tax Court is really like

Less intimidating than most people expect. The filing fee is modest — currently sixty dollars — and the court travels, hearing cases in cities across the country rather than only in Washington.

Where the amount in dispute is $50,000 or less for each year at issue, a case can be conducted under the court’s small tax case procedures. Those are less formal, evidence rules are relaxed, and cases are usually resolved faster. The trade-off is that a small tax case decision cannot be appealed.

• No jury. A single judge hears the case
• Most cases settle before trial, often at the Appeals stage
• You may represent yourself, though the government will be represented by counsel
• Trials are conducted in a designated city, frequently one within reach of the taxpayer

If the deadline has passed

In most circuits, including where this firm practices, the Tax Court treats the deadline as jurisdictional and cannot hear a case filed late regardless of the merits. A few circuits have recently held otherwise and allow the delay to be excused in limited circumstances, but that is an uncertain argument to litigate, not something to rely on. Absent that, the IRS assesses the tax and the matter moves to collection.

Options remain, but they are slower and generally more expensive:

• Audit reconsideration — asking the IRS to reopen the examination, usually where new documentation exists that was never considered
• Offer in compromise based on doubt as to liability — disputing that the amount is owed at all, rather than the ability to pay it
• Pay and sue for refund — paying the tax and filing a refund claim, then suing in federal district court or the Court of Federal Claims if it is denied
• Collection Due Process — where the underlying liability was never previously disputed, it can sometimes be raised in a CDP hearing

Each of those has its own requirements and none of them is as straightforward as the petition would have been. This is the central reason the 90-day window matters so much.

Mistakes that cost people the case

• Counting from the day the letter arrived instead of the date printed on it
• Assuming a phone call to the IRS preserves the right, or pauses the clock
• Waiting for a promised call back that never comes, until the period has run
• Deciding the amount is too large to fight, without checking how it was calculated
• Throwing away the envelope, which occasionally matters for proving mailing dates
• Filing a petition that omits a year or an issue that should have been included

What to do now

Find the date on the notice and count ninety days forward. Write that date somewhere you will see it. Then work out whether the amount is worth disputing, which usually requires understanding how the IRS arrived at it — frequently the figure is inflated by a missing cost basis, an unclaimed deduction, or a substitute return prepared without any of the reliefs you were entitled to.

If the deadline is close, call rather than email.

This page is general information about federal tax procedure. It is not legal advice and does not account for the facts of your matter. Reviewed August 2026.