There’s nothing worse than opening your mail, only to encounter bad news—even more so when it comes from the IRS. Receiving an IRS Notice CP3219A, Notice of Deficiency, is enough to get anyone’s stress levels through the roof! This is true, even when you don’t know what an IRS “Notice of Deficiency” actually means. If you’ve recently received a Notice of Deficiency, finding out more about your IRS tax problems is a must to finding a solution.
What is a Notice of Deficiency?
A Notice of Deficiency is an official letter from the IRS informing you of a discrepancy in your tax return. This occurs when the information provided through your IRS tax return doesn’t correspond with information sent by a third party such as employers and financial institutions. Essentially, it’s the IRS’s way of informing you that you may owe additional taxes. But, this is not the first letter that the IRS sends proposing the tax adjustment.
IRS Letter CP 2000
This notice is often preceded by an IRS Letter CP2000, which is a preliminary notice about discrepancies in your tax return. If you don’t respond to the CP2000 letter, the IRS escalates the issue by sending a Notice CP3219A. If you’ve received a notice CP3219A IRS letter, here’s what you need to know.
What Happens When You Receive an IRS CP3219A Notice?
Any apparent difference between your reported tax returns and tax data reported by external sources triggers immediate IRS action.
Before sending you a bill, the IRS will propose a tax adjustment based on the discrepancy. At this point, you have several options depending on whether you agree or disagree with the IRS’s findings.
The Notice of Deficiency (IRS Letter CP3219A) serves one purpose: informing you of the IRS tax problem so that you can address it promptly.
IRS Problem Resolutions for a Notice of Deficiency (IRS Letter CP3219A)
Once you receive a Notice Of Deficiency, the first thing you should do is evaluate the facts. Is there a tax return discrepancy? Do you consider that the IRS is making a mistake with this notification? Depending on your answer, what path to take to resolve your IRS tax problems.
What to do if the Notice of Deficiency is Correct?
If you’ve figured out that your tax returns were indeed filed incorrectly, finding a resolution for your tax problem will be straightforward.
- Form 5564: Simply sign the IRS’s Notice of Deficiency Waiver, officially called Form 5564 and submit it.
- Payment of Taxes: You’ll also have to pay your overdue taxes, along with some penalties and added interest for the delay.
- Filing Amended Return: Keep in mind that if upon your evaluation of your tax information, you discover even more unreported information, you’ll have to correct your tax return.
In the event that you over-reported instead of under-reported in your tax returns and owe no tax debt to the IRS, you can forget all about IRS tax problems. Just sign Form 5564 and you’re good to go!
What to do if the Notice of Deficiency is Incorrect?
Simply claiming there’s been a misunderstanding won’t cut it with the IRS. If you want to solve your IRS tax problems you’ll have to prove it.
- Call the IRS: The first thing you should do is communicate with the IRS. You can do this quickly over the phone, which is a great way to answer your questions and present your case.
- Submit a Signed Statement: The more formal approach though is mailing Form 5564 along with all the evidence or copies of records you can gather to support your claim.
- Reach Out to the Third Party Involved: Another way to help solve this IRS tax problem is reaching out to the third party that supplied the information. Having them correct their information is a great way to dispute and resolve your case.
- File a Petition in the U.S. Tax Court: Finally, you can file a petition with the U.S. tax court. Be sure to meet the deadline, as extensions are not granted.
Ways to Respond to the IRS Notice CP3219A
You can submit your response to the IRS Notice of Deficiency through:
- Online Upload: Use the IRS’s secure portal to submit your documents.
- Fax: Send a fax to the IRS number provided on the notice.
- Mail: Send a written response along with supporting documents via certified mail.
Time Limit for Responding to the IRS Notice of Deficiency: Letter CP3219A
You have 90 days from the date of the notice to dispute it. Responding to the IRS doesn’t extend the original time limit to file the petition in the U.S. Tax Court.
What Happens if one Doesn’t Respond
Ignoring an IRS CP3219A notice can have serious consequences:
- The IRS will automatically assess the proposed tax amount.
- You’ll receive a bill with penalties and interest.
- The IRS may begin collection actions, including wage garnishment or bank levies.
To avoid unnecessary penalties, ensure you respond before the deadline.
Tips for Handling an IRS CP3219A Notice
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Take Action Promptly
Time is of the essence when dealing with an IRS Notice of Deficiency (CP3219A). The IRS gives you a strict 90-day window (or 150 days if you are outside the U.S.) to respond. Failing to act within this timeframe can result in automatic tax assessments, penalties, and potential collection actions such as wage garnishment or bank levies. As soon as you receive the notice, review it carefully and determine your next steps.
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Gather All Relevant Documents
To effectively address the CP3219A notice, collect all necessary documentation related to your tax return. This includes W-2s, 1099 forms, financial statements, previous tax returns, and any other supporting records that can verify the accuracy of your reported income. If the discrepancy stems from a third party, such as an employer or financial institution, reach out to them for clarification and request any necessary corrections. Keeping detailed records will help strengthen your case, whether you agree with the notice or need to dispute it.
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Understand Your Rights
As a taxpayer, you have the right to challenge an IRS Notice of Deficiency if you believe it was issued in error. You can dispute the notice by providing evidence, requesting an amendment from a third-party institution, or even filing a petition with the U.S. Tax Court if necessary. Understanding your legal options ensures you can respond appropriately and avoid unnecessary penalties. Before signing any documents or making payments, take the time to evaluate the situation and seek clarification if needed.
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Seek Professional Help
If you’re unsure about how to proceed or feel overwhelmed by the complexities of tax law, consulting a tax attorney, CPA, or tax resolution expert can be a smart move. These professionals can help you navigate the process, file necessary appeals, and negotiate with the IRS on your behalf. Having an IRS tax attorney in your corner increases your chances of reaching a favorable resolution and avoiding costly mistakes.
Handling an IRS CP3219A notice correctly requires prompt action, thorough documentation, and a clear understanding of your rights. By taking these steps, you can address the issue effectively and minimize the impact on your finances.
Need help with the IRS CP3219A Notice?
Experienced attorneys and tax professionals at the Law Offices of Nick Nemeth in Dallas, Fort Worth, and Frisco help Texans with a variety of IRS tax problems, including dealing with a Notice of Deficiency (IRS Letter CP3219A). We recommend not speaking to the IRS before learning more about your situation. If you wish to get professional help for your tax problems, call us today at (972) 426-2944 to schedule your free consultation.
