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Taxpayers who do nothing in response to a pre-assessment letter will receive a Statutory Notice of Deficiency, commonly referred to as a 90-day letter. The 90-Day letter that is a Statutory Notice of Deficiency should not be confused with other 90-day letters, including the one required when innocent spouse relief is denied. § 6015. A taxpayer will also receive a Statutory Notice of Deficiency if he does not agree to the findings of the Office of Appeals following a protest. This 90-day letter grants the taxpayer 90 days in which to petition the Tax Court to redetermine the liability that is proposed by the examining agent. If the issue involves filing status, you must consider having the taxpayer file a joint return before the petition is filed. See IRC § 6013(b)(2)(B). Once a petition is filed, a joint return is no longer permitted to be filed. Because this period is prescribed by statute, the 90 days cannot not be extended. For this reason and to preserve the rights of the client, it is extremely important not to miss the 90-day deadline should a client come to the Clinic with a Statutory Notice of Deficiency. If a student overlooks this time limit he or she may receive a failing grade in the Clinic course.
The 90 day period within which a petition may be filed is counted from the date the Notice of Deficiency is mailed to the taxpayer's last known address. The IRS is required by law to include on the notice the last day a petition may be filed. IRC § 6213. During the 90-day period the IRS is barred from any assessment or collection activity and until the Tax Court decision is final if taxpayer files a petition [IRC § 6503(a)(1)] .
Failure to file a petition with the Tax Court will result in the deficiency being assessed. This is one of the steps the IRS takes before collection efforts begin.