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The 30-day and 90-day letters represent two different stages in the IRS dispute process:
The 30-day letter is your first chance to appeal the audit findings internally with the IRS Office of Appeals.
If you and the appeals office cannot reach an agreement, or if you skip the 30-day appeal, you will receive the 90-day letter. This represents your final opportunity to take the case to an external legal body, the U.S. Tax Court, before the tax is officially assessed.
Pre-assessment and the 30 day letter:
An IRS 30-day letter is a pre-assessment notice that proposes changes to your tax return and gives you a 30-day window to respond. The subsequent 90-day letter, or Notice of Deficiency, is a statutory notice that the IRS will assess the proposed tax if you do not formally challenge it in U.S. Tax Court.
The 30-day letter is typically sent after a tax audit, such as through the mail (Letter 525) or in person (Letter 915). It is your opportunity to resolve a dispute with the IRS before it becomes a formal, binding assessment.
What it includes: The letter comes with an examination report (Form 4549) that explains the proposed tax adjustments and the reasoning behind them.
Your options: Within 30 days, you can take one of the following actions:
Agree: Sign and return the form to accept the changes. The IRS will then bill you for any additional tax owed.
Disagree and appeal: Submit a written protest to request a conference with the IRS Independent Office of Appeals. This can help resolve the dispute without going to court.
Do nothing: If you ignore the letter, the IRS will automatically issue a 90-day letter, taking the case to the next level.
You generally have 30 days from the date on the IRS letter to file a written protest to appeal the proposed changes. If you do not respond to the 30-day letter, the IRS will typically send you a Notice of Deficiency, or 90-day letter, giving you 90 days to petition the U.S. Tax Court if within the United States, or 150 days if your address is outside the United States.
How to appeal within 30 days
To appeal the 30-day letter, you must send a formal, written protest to the IRS. The appeal process varies depending on the amount of tax, penalties, and interest in dispute:
For amounts over $25,000, you must file a formal written protest.
For amounts of $25,000 or less, you can file a "small case request". This can be a brief written statement or you can use IRS Form 12203, Request for Appeals Review.
IRS 90-day letter (Notice of Deficiency)
Also known as a Statutory Notice of Deficiency (e.g., Letter 3219), the 90-day letter is a formal legal notice that follows a failed appeal or lack of response to the 30-day letter. This is your last chance to dispute the tax liability before it becomes final.
What it includes: The notice formally states the IRS's final determination of your tax liability.
Your options: Within 90 days of the date on the letter, you have two options:
Petition Tax Court: Challenge the assessment by filing a petition with the U.S. Tax Court. This must be done within 90 days (or 150 days if you live outside the U.S.). This deadline cannot be extended by the IRS.
Pay the tax: Agree to the assessment, pay the tax, and file a claim for a refund in the U.S. District Court.
What happens if you do nothing: If you take no action within 90 days, the IRS will formally assess the tax liability, issue a bill, and can begin collections, including filing liens and levies.
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