IRS Notice of Deficiency

IRS Notice of Deficiency: What It Means and What to Do Next

Few things cause more anxiety than opening your mailbox and finding a letter from the IRS. One of the most serious letters you can receive is a Notice of Deficiency—sometimes called a 90-day letter.

If you live in San Antonio, Texas, and you’ve received this notice, don’t panic. With the right information—and the right legal help—you can take control of the situation.

What Is an IRS Notice of Deficiency?

A Notice of Deficiency is the IRS’s formal letter stating that it believes you owe additional taxes, along with possible penalties and interest.  This notice is not just a bill—it’s a legal document informing you of your right to dispute the IRS before the tax is officially assessed.

Why Is It Called a “90-Day Letter”?

You have 90 days (150 days if you’re outside the U.S.) from the date of the notice to file a petition with the U.S. Tax Court if you disagree with the IRS’s determination.

Act within 90 days:  You can fight the IRS before paying anything.

Do nothing:  The IRS will assess the tax and begin collections.
This deadline is firm.  Missing it means losing your chance to challenge the IRS in Tax Court.

Why Did You Receive a Notice of Deficiency?

The IRS may send this notice for several reasons, including:

Unreported income (W-2s, 1099s, investments, etc.)
Disallowed deductions or credits
Errors on your tax return
Adjustments following an audit

Sometimes the IRS is correct—but not always.  In many cases, they rely on incomplete or inaccurate third-party information.

Your Options After Receiving the Notice

If you’ve received a Notice of Deficiency, you have options:

Agree with the IRS – Sign and pay the balance due.
Disagree – File a petition in Tax Court within 90 days.
Explore resolution – Some cases can be resolved without going to court.

What To Do Right Away

Read the notice carefully to understand what the IRS is claiming.
Check for mistakes—these notices often contain errors.
Don’t ignore it—waiting past the deadline eliminates your right to contest.
Consult a local tax attorney—professional representation can protect your rights and strengthen your case.

Why Work With Ellis Tax Law?

At Ellis Tax Law, we serve clients across San Antonio and throughout Texas who are facing IRS Notices of Deficiency. We:

Analyze the IRS’s claims to uncover errors.
Advise you on whether to file in Tax Court, negotiate, or resolve directly.
Represent you every step of the way—so you don’t have to face the IRS alone.

Final Thoughts

Receiving an IRS Notice of Deficiency is stressful, but you don’t have to face it by yourself. You have rights, options, and time to act—if you move quickly.

📞 If you’ve received a Notice of Deficiency in San Antonio or anywhere in Texas, contact Ellis Tax Law today to schedule a consultation. We’ll help you respond with confidence.   

Frequently Asked Questions About IRS Notices of Deficiency

❓ What is an IRS Notice of Deficiency?
An IRS Notice of Deficiency—also called a 90-day letter—is the IRS’s formal notice that it believes you owe additional tax. It also gives you the right to challenge their determination in Tax Court before paying.

❓ Why did I receive an IRS Notice of Deficiency?
You may receive this notice if the IRS believes you underreported income, claimed incorrect deductions or credits, made errors on your return, or if they adjusted your return during an audit.

❓ How long do I have to respond to an IRS Notice of Deficiency?
You have 90 days (150 days if you’re outside the U.S.) from the date on the notice to file a petition with the U.S. Tax Court. If you miss the deadline, the IRS will assess the tax and begin collection.

❓ Do I have to go to court if I disagree with the notice?
Not always. Sometimes issues can be resolved directly with the IRS or through negotiation. However, if you want to formally contest the notice without paying first, filing in Tax Court is your best option.

❓ Should I hire a tax attorney for an IRS Notice of Deficiency?
Yes. These notices are serious legal documents. Ellis Tax Law can review the IRS’s claims, identify errors, and represent you before the IRS or Tax Court.