Glossary

Tax Deficiency

What is a Tax Deficiency, and How Does It Affect You?

A tax deficiency is the amount of additional tax the IRS determines you owe, beyond what you initially reported on your tax return. This happens when the IRS believes you underpaid your taxes. It’s the difference between the correct amount of tax and what you actually paid.

Related Terms

Understanding the terminology is helpful. Here are a few terms related to a tax deficiency:

  • Tax Liability: The total amount of tax you owe.
  • Tax Audit: An examination of your tax return by the IRS.
  • Penalties: Additional charges for not complying with tax laws.
  • Interest: A fee charged on unpaid taxes.
  • Installment Agreement: A payment plan with the IRS.

Recommended for You

Revenue Officer Plan Approval Form

The Revenue Officer Plan Approval Form is a critical document used in the tax compliance process to ensure plans made by taxpayers regarding settlements or payment agreements adhere to IRS standards.

Employee Digital Skill Assessments Deduction

The Employee Digital Skill Assessments Deduction allows employers to deduct costs associated with assessing and improving their employees' digital skills. It's a valuable tax relief for businesses investing in workforce development.

CP503L Reminder

The CP503L Reminder is an IRS notice indicating unpaid tax liability. Prompt attention is crucial to avoid penalties and additional interest charges.

CP89 Notice

The CP89 Notice is sent by the IRS to notify taxpayers about changes in their tax account due to detected discrepancies or errors in filed returns.

Workforce Equity and Diversity Tax Credit

The Workforce Equity and Diversity Tax Credit is a tax incentive designed to promote workplace diversity and equity. It encourages companies to implement inclusive hiring practices and offers financial benefits for meeting specific diversity criteria.

Rural Workforce Renewable Job Retention Credit

The Rural Workforce Renewable Job Retention Credit is a tax incentive designed to support job retention in rural areas, particularly within the renewable energy sector, fostering community growth and sustainability.