Notice of Deficiency

[AccTaxMan]

Client received a CP2000 back in August. A reply with supporting documents has been sent and I thought we just needed to wait for a response from the IRS. But last week client received a "Notice of Deficiency" which advised him to file a petition with the Tax Court within 90 days. Why would this happen? I thought the IRS would respond to our reply before taking further action like this.

[JohnH]

Your certified mail & return receipt card should be very helpful in establishing when you sent the initial response.

[AccTaxMan]

Your certified mail & return receipt card should be very helpful in establishing when you sent the initial response.

John, so the Notice of Deficiency means they did not receive the initial response? Would there be a Notice of Deficiency if they did receive it?

[joanmcq]

Did you mail or fax the response? Have you followed up with a phone call to see if the response was received? I've found that they usually give another 30 days for the response to be received/logged in before the NOD is sent.

[taxmandan]

John, so the Notice of Deficiency means they did not receive the initial response? Would there be a Notice of Deficiency if they did receive it?

Yes a NOD will be sent to tp while theIRS contemplates the response submitted by tp. Do NOT ignore the deadline for petition to tax court, the clock is running and there is no extension or excuse for missing the deadline.

[Kram BergGold]

My recent experience

IRS sent notice of deficiency when they were unhappy with our respose. I called them and found out what was missing and sent it. They closed the case before the 90 days ran out.

[S T]

My experience on CP 2000 notices, is 30 days from date on notice ( OP August 2012), call in for add'l 30 days to respond - and have been advised that even though not published, it is almost automatic for 60 days - some call centers mark the file, some do not) So far I have only 1 Client that IRS did not wait on the 60 day - and then we resolved on the NOD-90 day.

Given that guideline 60 days (from August) that would take you to October) so surprised you already received a NOD 90 day.

I have had a few NOD's , and then call back in, and submit or re-submit documents to address the CP2000, but all reps at IRS have stated NOT to go out to the 90 day deadline if the NOD was issued. I was able to resolve before the 90 day deadline, eliminating the Petition Procedure.

As others posted, do NOT lose sight of the 90 Deadline for Petition, but you might get lucky if you can resolve in the next 30 days or so!

Good Luck!

Sandy

[JohnH]

I use certified mail with return receipt for all CP2000 responses. I then put a note in my tickler file to look for the return receipt within a couple of weeks. If it doesn't show up I start backtracking to verify that the response was received by IRS - but that needs to be done well before the deadline.

[appelman]

I may be bucking the trend...

But I am down on certified mail. I've had too many occasions when it was delayed for weeks, and in one case simply disappeared. Priority mail isn't perfect, either, but it seems to have a better track record.

[Gary2]

I wonder whether these individual experiences in mail delivery are either local variations or simply insufficient to be statistically valid. I've never had direct experience with certified mail failing to get through, typically within a few days, never more than two weeks. With online delivery confirmation, I only consider return receipt mandatory whrn there's a hard deadline, but advisable in other cases where the dollar amount is significant. (The CP2000 has a soft deadline; the statute of limitations is hard.)

In any event, the only times I haven't been able to resolve things long before needing to take action on a 90 day letter was when the taxpayer wasn't willing to do the homework.