A formal notice issued by the IRS after an audit indicating that a proposed deficiency will be assessed unless the taxpayer files a petition with the U.S. Tax Court within a specified time.
An assessment of deficiency refers to the determination of additional tax owed by a taxpayer following an appellate review within the Internal Revenue Service (IRS) and a tax court adjudication, if necessary.
A Notice of Deficiency is a formal notice issued by the Internal Revenue Service (IRS) to a taxpayer, outlining the amount of additional tax owed and a summary of how the deficiency was calculated. This notice must be sent to the taxpayer's last known address to be legally valid.
An independent 19-judge federal administrative agency that functions as a court to hear appeals by taxpayers from adverse administrative decisions by the Internal Revenue Service (IRS). The Tax Court does not require the taxpayer to pay the alleged deficiency prior to suit. An adverse decision may be appealed as of right to the Court of Appeals and in rare cases to the U.S. Supreme Court.
