when an examination results in a proposed tax deficiency the first step the irs takes towards amending this deficiency is to issue a 30 day letter to the taxpayer it is known as a 30 day letter because the taxpayer has 30 days to respond before the irs processes the changes made to the return 
a notice of deficiency explains any adjustments and how the amount of any deficiency was calculated it explains the taxpayer s options to either agree to the additional tax liability by signing a waiver form 40893 or challenge it in u s tax court 21a notice of deficiency is sometimes referred to as a 90 day letter because it gives the taxpayer 90 days to dispute the tax assessment in the tax court the 90 day period within which a petition may be filed is prescribed by statute and cannot be extended the 90 day period is counted from the date the notice of deficiency is mailed to the taxpayer s last known address the irs is required by law to include the last day a petition may be filed directly on the notice of deficiency until 90 days expire or a tax court decision is final whichever is later the irs is barred from any assessment or collection activity 1it is important to note that a notice of deficiency is not a tax bill however if the taxpayer has not signed a waiver form 4089 agreeing to the changes3 or filed a petition with the tax court within the 90 day period the irs will assess the tax penalties and interest shown on the notice of deficiency and send a bill 2 this is one of the events that precedes and triggers irs collection efforts 