Also called a CP3219N Notice, Letter 531, or Notice of Deficiency; a 90 day letter is one of several types of letters sent by the IRS to individuals to inform them about their taxes and refunds. Specifically, it is a letter sent by the IRS to an individual that has been audited and found to have either (1) failed to submit their tax return or (2) submitted a deficient tax return. In either case, the IRS independently recalculates the individual’s tax, penalties, and interest on their tax using wages and income reported to the IRS by the individual’s employers, financial institutions, and other sources of income. The IRS then sends its assessed tax penalty within a 30 day letter (Letter 525), which allows the individual to accept or appeal the changes made to their return within 30 days, before the IRS processes the changes and sends a bill for the balance due in the 90 day letter.
The 90 day letter generally explains the IRS’s calculation of the individual’s tax liability and the taxpayer’s options. Taxpayers who wish to contest the tax penalty in their 90 day letter may either pay the assessed tax and file a request for a refund (or sue, if their request is denied) in District Court, or they may challenge the assessed tax immediately, without paying the tax, by filing a petition for review with the United States Tax Court within 90 days from the date of the notice (or 150 days, if they are located outside of the U.S). Failure to exercise either option within the allotted time is counted as a forfeiture of the right to contest the IRS’s assessment.
90 day letters serve as the government’s final determination of one’s tax liability in effort to assess and collect tax, as allowed under § 6212(a) of the Internal Revenue Code. They are formal legal notices, sent by certified or registered mail.
[Last updated in June of 2021 by the Wex Definitions Team]