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What is an IRS Notice of Deficiency?

November 10, 2017

What is an IRS Notice of Deficiency (CP3219A)?

An IRS Notice of Deficiency, or Notice CP3219A, lets you know that the information you reported on your tax return is different from the information reported to the IRS by third parties, such as your employer or any financial institution in which you have accounts, and the IRS has changed the amount of tax you owe.

If you agree with the changes made by the IRS and you do not have additional income, credits or expenses that you need to report, you do not need to amend your tax return. You can sign the Form 5564, Notice of Deficiency – Waiver and send it to the IRS. If you have additional income, credits or expenses, then you will need to amend your tax return and file Form 1040-X.

What to do if you don’t agree with the notice

In case you disagree with the notice, you should contact the IRS over the phone or send a written explanation supporting your position. You may also want to contact the third party that reported the information in question (e.g. employer) and ask them to correct it. The IRS will let you know how long you have to contest their assessment on the notice.

If you filed your tax return and you do not have a copy of it to check the alleged difference, you can request that the IRS to send you a copy of your tax return by sending Form 4506.

If your tax liability has increased because of the changes the IRS made, then you should know that the IRS will charge penalty and interest on the taxes that remain to be paid. Therefore, you should make immediate efforts to confirm the changes, and if found to be true, pay the balance to resolve your back taxes.

Taxpayers that cannot pay the unpaid taxes should apply for an IRS tax debt payment plan. After receiving this IRS notice, it is important to begin efforts to resolve the issue immediately, as penalty and interest are charged on unpaid taxes every month until the entire amount of tax debt is paid in full.

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