Written By: Michael Vale
Reviewed By: Bridgette Austin, Esq., EA, Co-Founder and Tax Attorney
Last Reviewed: August 7, 2026
An IRS notice of deficiency starts a 90-day clock, and that clock is the first thing to deal with. You have 90 days from the date printed on the notice (150 days if your address is outside the United States) to file a petition in the U.S. Tax Court. Miss it and the tax becomes final. If you agree with the IRS, you can sign Form 5564 and arrange to pay. If you disagree, you file the petition. If you agree but can’t pay, you may still want to petition to protect your rights, then set up a payment plan. One move you’ll see online but should skip at this stage: a Collection Due Process hearing is not how you answer this notice. Below is each option in order, and why that last point trips people up.
What is an IRS notice of deficiency?
It’s the letter the IRS has to send before it can charge you more tax. An IRS notice of deficiency is a formal letter, usually a CP3219A or CP3219N, that says the IRS believes you owe more tax and plans to assess it. People call it the 90-day letter because you get 90 days to petition the U.S. Tax Court before that tax becomes final.
A few things follow from that. The notice is not a bill, so a payment coupon is not the point of it. The IRS has to mail a valid notice before it can record the tax against you, which is why the letter matters so much. CP3219A goes out when the IRS adjusts a return you filed, often after a CP2000 or an audit. CP3219N goes out when you never filed and the IRS built a return for you from W-2 and 1099 data.
What counts as a tax deficiency?
A deficiency is the gap between the tax you reported and the higher tax the IRS says you owe. It usually comes from one of four things: income you left off (a 1099 or stock or crypto sale the IRS already has on file), deductions or credits the IRS disallowed, a math error, or a return you didn’t file at all. The IRS matches third-party records against your return, and when the numbers don’t line up, it proposes the difference. Plenty of these notices land after an audit, when the IRS disallows something and you didn’t answer the earlier letters.
Timing matters here too. The IRS generally has 3 years from the date you filed to issue a notice of deficiency. That stretches to 6 years if you understated income by a large amount, and there’s no time limit at all if you filed a fraudulent return or filed nothing.
How long do you have to respond, 90 or 150 days?
You get 90 days, or 150 days if the notice is addressed to you outside the United States. The number is printed on the notice itself, and the Taxpayer Advocate Service confirms the deadline can’t be extended by asking.
Read the count carefully, because it runs from the date the IRS mails the notice to your last known address, not the day it lands in your mailbox. The IRS does not have to prove you received it. If you moved and never updated your address, the clock can be most of the way gone before you know the letter exists. So the day you open it, find the last date to petition (the IRS prints it on page one) and count backward from there, not from today.
Your options in the first 90 days
You have five real choices, and each one costs or protects something different. Here they are side by side.
| Your situation | What you do | What you file | Deadline | What it means for you |
|---|---|---|---|---|
| You agree and can pay | Sign the waiver, then pay | Form 5564 | Before the tax grows | You give up the right to argue it in Tax Court |
| You disagree | File a Tax Court petition | Petition via DAWSON | 90 days from the notice date | Collection stops while the case runs |
| You agree but can’t pay | Consider petitioning to hold your rights, then arrange payment | Petition, then a payment request | 90 days to petition | Keeps options open; interest keeps running |
| You think the notice is wrong on its face | Ask the IRS to rescind it | Form 8626 (mutual agreement) | Within 90 days | Rare, and a new, higher notice can follow |
| You do nothing | The IRS assesses the tax | Nothing | After 90 days | You lose the Tax Court option and collection begins |
The rest of this page walks through each path.
Should you sign Form 5564?
Only if you agree with the whole notice, because signing it ends your Tax Court option. Form 5564 is the notice of deficiency waiver. Your signature tells the IRS you accept the extra tax and give up the right to contest it in Tax Court. If you agree, mail it back by certified mail with a return receipt so you have proof of the date.
Signing does not stop interest. Interest runs from the original due date of the return, usually April 15 of the year the tax was due, and by law the IRS generally can’t waive it. If you agree with the tax but the penalties are the problem, you may still qualify for penalty relief separately, so don’t treat the waiver as your only move.
What if you disagree with the notice?
You file a petition in the U.S. Tax Court, and you do it within the 90 days. This is the one path that lets you fight the tax without paying it first. Once the court receives your petition, the IRS can’t assess or collect the tax while the case is open, and most cases get routed to the IRS Office of Appeals for a settlement conversation before any trial.
You can file a petition online through the court’s DAWSON system at ustaxcourt.gov, or on paper by mail. Only the person named in the notice can file it, which gets tricky for a deceased taxpayer or a dissolved business. You don’t need every document perfect on day one; you need the petition filed on time. Bring your support (bank records, corrected 1099s, receipts for the deductions in question) to the Appeals stage.
Can you request a Collection Due Process hearing instead?
No, and this is where a lot of online advice, including some law firm pages, gets it wrong. A Collection Due Process hearing is not a response to a notice of deficiency. That right shows up later in the process, after the IRS files a tax lien or sends a Final Notice of Intent to Levy, and you request it on Form 12153 within 30 days of that collection notice, not within the 90 days you have now.
There’s a second reason it’s the wrong tool here. Under IRC 6330(c)(2)(B), you can only argue the underlying tax at a CDP hearing if you did not already get a chance to dispute it. Receiving a notice of deficiency counts as that chance, whether or not you petitioned. So a CDP hearing later usually can’t reopen the same tax this notice covers. And the claim you’ll see that a CDP hearing “stops interest” is not right either. A timely CDP request can pause levy action, but interest on the tax keeps adding up. Treat the Tax Court petition as your tool at this stage, not a CDP request.
Does anything pause the 90-day clock in 2026?
Almost nothing does, and that’s the trap. Filing a Tax Court petition is the move that protects your rights. Asking an IRS employee for help, requesting a rescission, or sending in an offer in compromise does not stop the 90 days. The Taxpayer Advocate Service is direct about this: those actions don’t prolong the time to petition. People lose the courthouse because they spent the 90 days negotiating instead of filing.
One development worth knowing, without leaning on it. Courts are now split on whether that 90-day deadline is truly absolute. In Culp v. Commissioner, the U.S. Court of Appeals for the Third Circuit held the deadline can be equitably tolled in narrow cases, and a 2025 Second Circuit decision reached a similar result. That is not a safety net. The IRS still treats the deadline as firm, most taxpayers live outside those two circuits, and tolling only helps in unusual facts. File within 90 days and you never have to test it.
What if you agree but can’t pay?
Petition first if there’s any chance the tax is wrong, then deal with how to pay it. Once the tax is settled or assessed, you have a few ways to handle a balance you can’t cover in full. You can set up a monthly payment plan with the IRS. You may be able to settle for less than the full amount through an offer in compromise if your income and assets support it. And if paying anything would leave you unable to cover basic living costs, the IRS can mark your account as currently not collectible and pause collection.
The order matters here. An offer in compromise is a collection tool, not a response to the notice. Sending one during the 90 days does not hold your Tax Court rights. If you want to argue the tax, petition; then pursue the payment option.
What happens if you miss the 90-day deadline?
The IRS assesses the tax, and collection starts. From there it can file a tax lien, garnish wages, or levy a bank account. You still have a few options, they’re just harder. You can ask for audit reconsideration and submit information the IRS never saw, which works best if you didn’t take part in the original audit. You can pay the tax, file a refund claim, and if the IRS denies it, sue for a refund in U.S. District Court or the Court of Federal Claims, though both generally require you to pay the full amount first. None of these is as clean as a timely petition, which is the whole reason the 90-day window is worth protecting.
When to bring in a tax attorney
Talk to a tax attorney well before day 90, for two reasons. The petition deadline is unforgiving, and the strategy choice (agree, petition, or pay and fight later) changes what you owe and what rights you keep. A tax attorney can read the notice, check whether the IRS even followed the rules to issue it, file the petition, and take the case into Appeals. If you’ve received an IRS notice of deficiency, the smartest first step is a short call with a Michigan tax attorney while you still have every option on the table.
FAQs
How do I respond to an IRS notice of deficiency?
You have 90 days from the date on the notice (150 if you’re outside the United States) to file a petition in the U.S. Tax Court if you disagree. If you agree, you sign Form 5564 and arrange to pay. If you can’t pay, you may still petition to protect your rights, then set up a payment plan or offer in compromise.
Is a notice of deficiency a bill?
No. It’s a legal notice that the IRS plans to assess more tax, not an assessed balance. It becomes a bill only after the 90 days pass without a petition, or after you sign Form 5564. Until then you can still take it to Tax Court.
What is IRS Form 5564?
Form 5564 is the notice of deficiency waiver. Signing it means you agree with the extra tax and give up your right to contest it in Tax Court. Only sign it if you agree with the entire notice, and mail it certified so you have proof of the date.
Does an offer in compromise stop the 90-day deadline?
No. An offer in compromise is a way to settle what you owe, not a response to the notice. Sending one does not pause the 90 days to petition Tax Court. If you want to dispute the tax, file the petition first, then pursue the offer.
Can I request a Collection Due Process hearing after a notice of deficiency?
Not as a response to this notice. A CDP hearing comes later, after a lien or a levy notice, on Form 12153 within 30 days of that notice. And because you already got a chance to dispute the tax through the notice of deficiency, a later CDP hearing usually can’t reopen the same liability.
What happens if I ignore the notice of deficiency?
After 90 days the IRS assesses the tax and can start collecting with liens, levies, and wage garnishment. You may still try audit reconsideration or pay and sue for a refund, but you lose the right to fight it in Tax Court without paying first.
How long does the IRS have to send a notice of deficiency?
Generally 3 years from when you filed the return. It extends to 6 years if you understated income by a large amount, and there’s no limit if you filed a fraudulent return or didn’t file.
Bridgette Austin, Esq., EA, spent three years at Michigan State University’s Tax Clinic representing low-income taxpayers before the IRS – two as a student clinician, one as a post-graduate fellow. That work shaped her practice. A Bellaire, Michigan native with a Northern Michigan University bachelor’s and an MSU law degree, she now resolves IRS and State of Michigan tax debt cases at Austin & Larson.
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