February 5, 2016

9781453_sThe IRS sends out many different types of collection letters to its taxpayers. While any letter you receive from the IRS should be taken very seriously—there are some letters that have more legal implications compared to others.

Here are some letters that require your urgent attention and what they mean:

Letter 531 – Notice of Deficiency

A notice of deficiency, also known as a “statutory notice of deficiency” or a “90-day letter” is the final notification of the Commissioner’s determination that changes are going to be made to your tax return. This letter arrives in your mailbox when the IRS has established in a tax audit that you owe a specific amount or other amounts for tax years identified in the letter.

With a notice of deficiency, the IRS is informing you that you have only 90 days to dispute this amount in Tax Court if you do not agree. If you let this period of time lapse or if you lose your case in Tax Court, then the decision becomes final.

CP 90 – Final Notice of Intent to Levy

According to the Internal Revenue Code, the IRS must notify a taxpayer of any intent to levy before starting enforcement by seizure or levy. Without the Final Notice of Intent to Levy, the IRs cannot levy your bank accounts, wages, and property.

This final notice gives you 30 days to file an administrative appeal with the IRS in order to dispute its intent to start collecting taxes from you. Filing an appeal stops the IRS from levying you while it is pending, allowing to to protect your accounts and wages from the IRS while you work out a solution with them. Even if you lose the appeal, however, you may take another 30 days to re-appeal the decision to the Tax Court. If action is not taken prior to the 30-day deadline, the IRS can issue the levy. It can also file a Notice of Federal Tax Lien, which gives the IRS legal claim to your property as a payment or security for the tax debt.

Letter 1153 – Trust Fund Recovery Penalty Letter

Unless prior notice and appeal rights are provided, the IRS is unable to make an assessment against business owners for unpaid employee withholding taxes. A Trust Fund Recovery Penalty Letter is issued to any individual with decision making authority over payment of employee withholding taxes. It explains that the IRS’s efforts to collect federal employment or excise taxes owed by a business have not resulted in full payment of the liability, thus proposing to assess a penalty against you.

You are given 60 days upon receipt of the Trust Fund Recovery Penalty Letter to appeal the decision with the individual or office that sent it to you. The appeal prevents an assessment from being made against you.


A Summons is issued when a local IRS Revenue Agent or Special Agent is working the case, requiring you to appear at a certain time and location. This letter is issued when the IRS employee feels that you may not be in compliance in requests for information, or believes that you are falsifying or withholding information. There is generally an Attachment to Summons that requests for records in your possession for specific tax years and supporting certain kinds of tax filings. If you fail to obey the summons, you may face a fine amounting to up to $1,000, imprisonment of up to one year, or both.

Ignoring a threatening letter from the IRS is one of the worst things you can do! If you receive any of the abovementioned letters from the IRS, it is in your best interests to consult with an attorney as soon as possible.

Categories: Blog, IRS, Mailed Tax Notices