Let’s return to an IRS notice we have discussed in the past: the 90-Day letter or Notice of Deficiency. It is commonly referred to as a “NOD” or “SNOD.”
If you get one, you are neck-deep into IRS machinery.
The IRS has already sent you a series of notices saying that you did not report
this income or pay that tax, and they now want to formally transfer the matter
to Collections. They do this by assessing the tax. Procedure however requires
them (in most cases) to issue a SNOD before they can convert a “proposed”
assessment to a “final” assessment.
It is not fun to deal with any unit or department at the
IRS, but Collections is among the least fun. Those guys do not care whether you
actually owe tax or have reasonable cause for abating a penalty. Granted, they
might work with you on a payment plan or even interrupt collection activity for
someone in severe distress, but they are unconcerned about the underlying story.
Unless you agree with the proposed IRS adjustment, you
must respond to that SNOD.
That means you are in Tax Court.
Well, sort of.
The IRS will return the case to the IRS Appeals with instructions
and the hope that both sides will work it out. The last thing the Tax Court
wants is to hear your case.
This week I finally heard from Appeals concerning a filing
back in March.
Here is a snip of the SNOD that triggered the filling.
Yeah, no. We are not getting rolled for almost $720 grand.
I mentioned above that this notice has several names,
including 90-day letter.
Take the 90 days SERIOUSLY.
Let’s look at the Nutt case.
The IRS mailed the Nutts a SNOD on April 14, 2022 for
their 2019 tax year. The 90 days were up July 18, 2022. The 18th was
a Monday, not a holiday in fantasy land or any of that. It was just a regular
day.
The Nutts lived in Alabama.
They filed their Tax Court petition electronically at
11.05 p.m.
Alabama.
Central time.
90 days.
The Tax Court is in Washington, D.C.
The Tax Court received the electronic filing at 12.05
a.m. July 19th.
Eastern time.
91 days.
The Tax Court bounced the petition. Since it had to be
filed with the Tax Court - and the Tax Court is eastern time - the 90 days had
expired.
A harsh result, but those are the rules.
Our case this time was Nutt v Commissioner, 160
T.C. No 10 (2023).
