The CP3219N letter is a Notice of Deficiency issued when the IRS has not received your return for a particular period and has calculated your estimated liability based on income information reported to them on your behalf. Once they take this step, they can levy fines against your account and pursue other collection efforts. Even worse, the amount they estimate that you owe is very likely higher than what you really owe.
To avoid further problems, it’s best to act quickly. You have 90 days to respond to this notice. Keep reading to learn more about the CP3219N notice, how to handle it, and how our team of tax resolution legal professionals can help you navigate your complicated situation. To get help now, contact us at Wiggam Law today.
Understanding the CP3219N Notice
An IRS Notice of Deficiency is a letter from the IRS explaining your current tax situation. A CP3219N is often called a ’90-day letter’ because you typically only have a 90-day period to respond to the notice before the IRS takes action. You have 150 days to respond if the letter was sent to you outside the country.
Why did you receive a Notice of Deficiency? The IRS did not receive your tax return but determined that you should’ve filed based on financial information gathered from third parties. They have already attempted to notify you about your failure to file, but you have not responded. As a result, the IRS went ahead and proactively determined your estimated tax liability based on the information available to them.
If you do not file a petition with the Tax Court to challenge the assessment or file your own return within 90 days, then the IRS will go ahead and file your returns for you, assess the taxes, penalties, and interest, and potentially begin other collection efforts.
Reasons for Receiving a CP3219N Notice
You will receive a CP3219N Notice when the IRS determines you have unfiled taxes and have not responded to notices about filing your taxes. The IRS must have access to enough financial information to file a tax return on your behalf so they can send you a CP3219N.
The IRS cannot collect taxes that have not been assessed. Thus, they use this process to assess taxes against you if you don’t file a tax return.
Your Rights and Options
Receiving this type of letter can feel intimidating, especially once you realize you’re on a strict deadline. That said, you should always carefully read the entire letter to ensure everything is accurate and you understand the notice.
Once you’ve done so, you can start to consider your rights and options. You always have the right to challenge the IRS’s determination by filing a petition with the U.S. Tax Court. You also have the right to file your own tax return, which is more likely to provide you with a lower tax liability. Finally, you have the option of reaching out to the IRS about the situation to get more information on how to proceed.
If you can’t afford to pay off your estimated or actual tax liability, then you have the right to negotiate with the IRS. In general, the IRS does not want to punish or penalize taxpayers who genuinely can’t pay what they owe due to financial hardship. You have the right to prove your financial status to the IRS if you think you might qualify for a settlement or another type of tax relief.
How to Respond to a CP3219N Notice
When you receive your letter, you need to decide what to do quickly. You need to consider your options and act before the IRS proceeds with filing a substitute return and assessing tax against you.
Often, the best option is to file your own tax return. If you file a return with the proper tax credits, deductions, and filing status, you will likely get a lower tax liability than shown on the notice of deficiency. To file your old returns, gather documentation proving your income, expenses, and any deductions you’re filing for, and consider working with a professional tax preparer to help with the process.
Alternatively, if you agree with the amount due shown on the deficiency notice, you don’t have to file a new tax return. Instead, you can just contact the IRS to set up a payment arrangement for your tax debt.
In all cases, read through your letter, consider your options, and decide whether you want to work with a tax professional. Getting solid legal advice from a tax attorney can help you navigate your situation in a way that’s most likely to secure a better outcome. Once in touch with a tax attorney, you’ll either file your returns and begin negotiating with the IRS or work towards appealing or fighting the agency’s tax determination.
If you do not meet the 90-day deadline, then the IRS will file the SFR and potentially move forward with other collection efforts.
Disputing CP3219N With a Tax Court Petition
Do you disagree with the IRS’ deficiency determination? If so, you have 90 days to file a Tax Court petition. Courts cannot review a petition if it is filed late, so you need to be sure you file your petition in time.
A petition is necessary if you want to challenge the tax proposed by the IRS. To do so, you can download a petition form from the Tax Court website and send it to:
United States Tax Court
400 Second Street, NW
Washington, DC 20217
Once your petition is received, the Tax Court will review your case. Payments for your taxes will be postponed until your case is fully reviewed. You have the option of simplifying your court process if you owe $50,000 or less. Typically, most cases will be resolved before trial.
Preventing Future Notices
One of the best ways to prevent receiving future notices from the IRS is to be as vigilant as possible with your taxes. Get informed regarding your obligations and do your best to always file on time. The best way to ensure you report everything is to keep good track of all the income you receive throughout the year with a solid record-keeping strategy.
When to Seek Professional Help
If you’re not sure how to handle your CP3219N notice, then it’s time to reach out to a professional tax resolution specialist for assistance. The right tax lawyer will go over the letter with you, explain your options, listen to you outline your current financial situation, and hear you out when it comes to how you’d prefer to handle the situation. They can help you collect the right documentation you need to prove your income levels, and they’ll also help you identify any tax credits or deductions that can help you minimize your tax liability.
IRS CP3219N Notice FAQs
Do you have more questions about how you should handle your recent IRS CP3219N notice? In general, speaking one-on-one with a tax professional is the best way to get personalized advice that fits your situation. That said, we’ll go over some basic answers to some of the most frequently asked questions about CP3219N notices below.
What is an IRS Notice of Deficiency or CP3219N?
An IRS Notice of Deficiency, also called a CP3219N or 90-day letter, is a letter you might receive from the IRS if you didn’t file your tax returns and the IRS determines that you should’ve filed. You shouldn’t receive this notice unexpectedly, as you should’ve received previous notices regarding your unfiled taxes.
How do I properly respond to a CP3219N Notice?
You have a few options for responding to a CP3219N Notice. For one, you may choose to file your tax returns. The returns you file will supersede any estimate made by the IRS, and it’s more likely to be more financially beneficial for you. This will not eliminate your civil penalties or tax liability, but it could reduce the amount you wind up paying to the IRS.
Another option you have is to do nothing. If you take this route, the IRS will proceed with its estimate, charge you fees and penalties, and send you a tax bill. Another option you have is to dispute the IRS’ tax estimate. To determine the best response based on your unique circumstances, it’s best to speak with a tax lawyer.
What happens if I ignore the Notice of Deficiency?
If you don’t respond to the letter or file a petition, then the IRS will assume that you agree with their assessment. The tax debt estimated by the department will be assessed against you, plus any interest and penalties. The next communication you receive from the IRS will be a tax bill.
Can I dispute the IRS’s findings in a CP3219N Notice?
Yes. You can dispute the IRS’s findings within your CP3219N notice by filing a petition with the Tax Court. Once you file your petition, you’ll want to gather up any documentation or evidence that will help disprove the IRS’s claims.
What are the deadlines for responding to a CP3219N Notice?
You have 90 days to respond to a CP3219N Notice before the IRS takes action (or 150 days if the Notice is sent outside the country).
How can I avoid getting a CP3219N Notice in the future?
Taxpayers can avoid getting a CP3219N Notice by staying on top of their tax obligations. This starts with properly recording all your sources of income throughout the year. Once you receive all your tax information, you can confidently file for the year in question.
Is hiring a tax professional necessary for dealing with a CP3219N Notice?
No. It is possible to deal with a CP3219N notice without any tax representation. It will be up to you to identify your options, pursue the best course of action, file your proper tax returns, navigate any tax debt, and negotiate any tax debt. While it is possible to handle this on your own, a tax professional can help ensure that your situation is taken care of properly.
Do You Need Help Resolving Your Tax Problems?
Receiving a CP3219N letter is anxiety-inducing, and unfortunately, you need to respond in a timely manner to prevent your situation from spiraling even further out of control. This letter is dubbed a ’90-day’ letter because you’re only provided that amount of time to act.
If you’re not sure what your best path forward is after getting this notice, then it’s time to reach out to a tax resolution specialist. Here at Wiggam Law, our tax experts are also certified lawyers, so we are skilled at leveraging the law to your advantage.
We can help you better understand your options, consider your financial circumstances, and help you work towards a solution. Let’s talk about the best options for your situation. Schedule a consultation with our team or call us at (404) 233-9800.