What To Do About IRS Notice of Deficiency

Written by Banks Editorial Team
3 min. read
Written by Banks Editorial Team
3 min. read

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Did you recently get an IRS Notice of Deficiency? Before going into full-blown panic mode, take a moment to review the notice to understand what it means. You should also reach out to a reputable tax professional if needed to get clarity on the notice and the best possible course of action for your situation. 

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What CP3219A Notice Is About

The Internal Revenue Service (IRS) sends a CP3219A Notice to taxpayers if discrepancies exist between what’s reported on the tax filings and information on file with the IRS. It includes these components:

  • The increase or reduction in your federal tax liability and how the IRS computed this figure 
  • What actions to take regarding the notice
  • How to dispute the notice in U.S. Tax Court (if applicable)

What You Must Do About Notice Of Deficiency

Upon receipt, read the notice to determine if you have an outstanding balance. The next steps will depend on if you agree or disagree with the changes. 

What To Do If You Agree With The Notice

Complete and return Form 5564 (included with the original notice) via postal mail using the envelope provided by the IRS or by fax to the number included on the notice. 

What Is IRS Form 5564

IRS Form 5564 (Notice of Deficiency – Waiver) is used to indicate that you agree with the proposed adjustments stated in IRS Notice CP3219A. 

What To Do If You Want To Dispute The Deficiency

If you disagree with the notice, you have a few options.  

Call IRS

Reach out to the IRS by calling the number listed on the notice to share any information to help your case. You’ll also need to provide a written and signed statement, along with supporting documentation, by mail to corroborate what’s communicated by phone with the IRS agent.  

File an appeal with the IRS

If you’d prefer not to call, file an appeal by mailing the documents listed above directly to the IRS. Also, reach out to the information furnisher (or party that provided information to the IRS) and request that they modify the figures and provide you with accurate, updated documents. You’ll also want to provide these documents in the package that you send to the IRS. 

If the error results from identity theft, fill out and submit Form 14039 (Identity Theft Affidavit) to the IRS. 

File a petition with the US Tax Court

Visit www.ustaxcourt.gov for more information on how to file a case with the US Tax Court. You’ll find the documents you need in the e-Filing & Case Maintenance menu. Prepare to file a petition and remit payment for the filing fee by the date listed on the notice.

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Frequently Asked Questions

Below are frequently asked questions regarding CP3219A notices. 

Is CP3219A Notice a Bill For Taxes?

No, it is not a bill but a letter from the IRS communicating proposed changes to your federal tax liability based on the information provided to the IRS by third parties. 

What To Do If You Can’t Pay Increased Tax?

If you’re unable to pay the additional tax liability, explore payment options on the IRS website. A popular choice is the installment agreement, and you can request one if you qualify by submitting Form 9465 (Installment Agreement Request).  

Do I Need To Amend My Return?

It’s unnecessary to amend your return if you agree with the proposed changes. However, you’ll want to amend your return using Form 1040-X (Amended U.S. Individual Income Tax Return)  if you previously omitted income, expenses or tax credits. Be sure to notate “CP3219” at the top of the document and submit it by mail or fax to the IRS along with a signed and dated copy of Form 5564. 

Can I Get A Payment Plan?

The IRS offers three payment plans

  • Short-Term Payment Plan: available for taxpayers who owe under $100,000 (including penalties and interest) and can remit payment within 120 to 180 days
  • Long-Term Payment Plan: available for taxpayers and businesses who owe up to $50,000 or $25,000, respectively, and agree to pay within six years
  • Extended-Term Payment Plan: available to taxpayers on a case-by-case basis, and the terms of the agreement are determined by affordability

How To Get Professional Tax Attorney Help

If you’ve recently received an IRS Notice of Deficiency and aren’t quite sure what to do next, consider hiring a tax professional for guidance. Larson Tax Relief provides free evaluations to taxpayers and businesses facing collection actions from the IRS or state tax authorities. You can fill out the online form or call 833-833-4151 to request a no-obligation evaluation of your case.

The team of 65 employees with 17 IRS Enrolled Agents at Larson Tax Relief specializes in emergency and long-term tax relief and can provide real solutions. Established in 2005, Larson is an award-winning firm with an A+ rating with the Better Business Bureau and rated #1 with Consumer Affairs. They have served over 18,000 clients in all 50 states and have consultants standing by waiting to help identify ways to fix your issue.

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