Letter 3219C: Statutory Notice of Deficiency

The Letter 3219C, also known as the Statutory Notice of Deficiency, is a formal notice from the IRS informing taxpayers that the IRS has determined they owe additional taxes after reviewing their return. This letter gives taxpayers the legal right to challenge the deficiency in U.S. Tax Court if they disagree with the IRS’s findings.

Key components of the Letter 3219C:

• Explanation of Deficiency: The notice will detail the amount of the additional taxes owed, as well as any penalties and interest that have been assessed. It will explain the reasons for the deficiency, such as unreported income or disallowed deductions or credits.
• Right to Challenge in Tax Court: Taxpayers have 90 days from the date of the notice to file a petition in U.S. Tax Court if they want to contest the IRS’s determination. During this period, the IRS cannot take collection actions, such as levying assets.
• Options for Settlement: If the taxpayer agrees with the IRS’s findings, they can settle the debt by paying the amount due or setting up a payment plan. The letter will include instructions for paying the balance or requesting an installment agreement.
• Consequences of Inaction: If the taxpayer does not respond within the 90-day window, the IRS will assess the additional tax liability and may begin collection actions, such as wage garnishment or property liens.

The Letter 3219C is one of the final notices before the IRS begins collecting additional taxes, and taxpayers should take action to either contest or resolve the deficiency.