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90-day letter. If you do not respond to the 30-day letter,

pended, submit Form 843, writing “Section 6404(g) Notifi-

or if you later do not reach an agreement with an Appeals

cation” at the top of the form, with the IRS Service Center

Officer, the IRS will send you a 90-day letter, which is also

where you filed your return. The IRS will review the Form

known as a notice of deficiency.

843 and notify you whether interest will be abated. If the

You will have 90 days (150 days if it is addressed to you

IRS does not abate interest, you can pay the disputed

outside the United States) from the date of this notice to file

interest assessment and file a claim for refund. If your

a petition with the Tax Court. Filing a petition with the Tax

claim is denied or not acted upon within 6 months from the

Court is discussed later under Appeals to the Courts and

date you filed it, you can file suit for a refund in your United

Tax Court.

States District Court or in the United States Court of Fed-

eral Claims.

The notice will show the 90th (and 150th) day by

TIP

If you believe that an IRS officer or employee has made

which you must file your petition with the Tax

an unreasonable error or delay in performing a ministerial

Court.

or managerial act (discussed later under Abatement of

Interest Due to Error or Delay by the IRS), file Form 843

Suspension of interest and penalties. Generally, the

with the IRS Service Center where you filed the tax return.

IRS has 3 years from the date you filed your return (or the

If the Service denies your claim, the Tax Court may be able

date the return was due, if later) to assess any additional

to review that determination. See Tax Court can review

tax. However, if you file your return timely (including exten-

failure to abate interest, later under Abatement of Interest

sions), interest and certain penalties will be suspended if

Due to Error or Delay by the IRS.

the IRS does not mail a notice to you, stating your liability

and the basis for that liability, within an 18-month period

If you later agree. If you agree with the examiner’s

beginning on the later of:

changes after receiving the examination report or the

•

The date on which you filed your tax return, or

30-day letter, sign and return either the examination report

•

or the waiver form. Keep a copy for your records. You can

The due date (without extensions) of your tax return.

pay any additional amount you owe without waiting for a

If the IRS mails a notice after the 18-month period, interest

bill. Include interest on the additional tax at the applicable

and certain penalties applicable to the suspension period

rate. This interest rate is usually for the period from the due

will be suspended.

date of the return to the date of payment. The examiner

The suspension period begins the day after the close of

can tell you the interest rate(s) or help you figure the

the 18-month period and ends 21 days after the IRS mails

amount.

a notice to you stating your liability and the basis for that

You must pay interest on penalties and on additional tax

liability. Also, the suspension period applies separately to

for failing to file returns, for overstating valuations, for

each notice stating your liability and the basis for that

understating valuations on estate and gift tax returns, and

liability received by you.

for substantially understating tax liability. Interest is gener-

ally figured from the date (including extensions) the tax

The suspension does not apply to a:

return is required to be filed to the date you pay the penalty

and/or additional tax.

CAUTION

•

If you pay the amount due within 10 business days after

Failure-to-pay penalty,

the date of notice and demand for immediate payment, you

•

Fraudulent tax return,

will not have to pay any additional penalties and interest.

•

This period is extended to 21 calendar days if the amount

Penalty, interest, addition to tax, or additional

due is less than $100,000.

amount with respect to any tax liability shown on

your return or with respect to any gross misstate-

ment,

How To Stop Interest From Accruing

•

Penalty, interest, addition to tax, or additional

If you think that you will owe additional tax at the end of the

amount with respect to any reportable transaction

examination, you can stop the further accrual of interest by

that is not adequately disclosed or any listed trans-

sending money to the IRS to cover all or part of the amount

action, or

you think you will owe. Interest on part or all of any amount

•

Criminal penalty.

you owe will stop accruing on the date the IRS receives

your money.

You can send an amount either in the form of a deposit

in the nature of a cash bond or as a payment of tax. Both a

Seeking relief from improperly assessed interest.

deposit and a payment stop any further accrual of interest.

You can seek relief if interest is assessed for periods

However, making a deposit or payment will stop the ac-

during which interest should have been suspended be-

crual of interest on only the amount you sent. Because of

cause the IRS did not mail a notice to you in a timely

compounding rules, interest will continue to accrue on

manner.

accrued interest, even though you have paid the underly-

If you believe that interest was assessed with respect to

a period during which interest should have been sus-

ing tax.

Page 5

Publication 556 (Rev. August 2005) - Examination Of Returns, Appeal Rights,and Claims For Refund Page 5

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