How to respond after receiving a Notice of Deficiency CP3219A
- Thomas F. DiLullo, Esq., CPA
- Sep 20, 2025
- 6 min read
Table of contents
What is a Notice of Deficiency?
Why did you receive this letter?
Review the letter carefully.
What are your options?
If you agree wit the IRS findings.
If you disagree with the IRS findings.
What to do after you file the Petition.
Gather proof to support your position.
Typical proof of income
Typical proof of deductions
Update or recreate your booking records
Interpretation of Tax Law
Organize the documentary proof for easy presentation
Frequently Asked Questions
You don’t have to face this challenge alone.
What is a Notice of Deficiency?
IRS Letters 3219 and 531 (also known as Notice of Deficiency or 90-Day Letter) are official notices indicating that the IRS is proposing an increase to tax on your tax return, resulting in a balance due. Continuing the text:These letters are significant because they represent the final notice before the IRS can proceed with collection actions. Upon receiving a Notice of Deficiency, taxpayers have 90 days (150 days if the notice is addressed to a person outside the United States) to respond.
Why Did You Receive a Notice of Deficiency CP3219A ?
You received a notice of deficiency or cp3219a because the IRS completed an examination or audit of your tax return and is proposing an increase in the amount of tax you owe.
Reviewing the IRS Notice of Deficiency
Review the notice carefully and note the following information in the notice,:
Your name and address (are they correct),
Your taxpayer ID no. (SS no. or EIN),
The deadline to file a petition with the US tax court (on the top right of letter in information block, last line).
The year or years involved and the amount of the tax deficiency and penalties, if any.
Form 4549, Income Tax Examination Changes or Form 5278, Statement – Income Tax Changes is included with the notice. It shows how the IRS figured out the tax increase and contains an explanation of each item of income and expense which the IRS proposes to adjust, such as:
Unreported income items.
Disallowed deductions.
Mistakes on the return.
What Are Your Options?
Agree with the Changes: If you accept the proposed adjustments, you should arrange payment for the additional tax due. All of the usual alternatives to pay the tax are available, for example installment agreement, partial payment installment agreement, Offer in Compromise, other options.
Dispute the Adjustments: If you disagree, you have 90 days to file a petition with the Tax Court to challenge the proposed changes
Resolution of the Notice of Deficiency will result in determination of the amount of the tax liability.
How the tax will be paid will come later. After the amount of the tax liability is determined at this stage, your case will be transferred to the IRS Collections Division. Payment of the tax liability will be resolved with the Collections Division.
If you agree with the how the IRS calculated your tax bill
⦁ You may pay the amount of the tax liability in full.
⦁ You may request to pay the amount pursuant to an installment agreement, an offer in compromise (link to page in site) or other collection alternative.
If you disagree with the IRS’s determination
You must contest the notice by filing a petition with the U.S. Tax Court.
Act quickly, you have 90 days from the date of the notice to file the petition.
You may file a petition electronically or you may prepare and file a paper petition. The instructions for filing electronically are included in the Notice of Deficiency.
The address of the U.S. Tax Court is: United States Tax Court, 400 Second Street, NW Washington, DC 20217
It is timely filed if the United States Postal Service postmark date is within the 90-day period.
The U.S. Tax Court is located in 74 cities, and your case will be assigned to one you select.
The great majority of cases filed in the U.S. Tax Court are settled.
Interpretation of Tax Law
Your disagreement with the IRS audit may be due to difference of interpretation of a tax law. In such case, the assistance of an attorney would be needed. For example, See Glassman v. Comm. Involving the issue of whether a penalty assessment was properly authorized by an IRS supervisor.
Steps for Filing the petition
First, get the form here
Gather proof to support your position.
The specific documents needed depend on the nature of the income claimed to have been underreported or the deduction that had been disallowed.
Provide proof that you do not have additional income, contrary to what the IRS says.
The goal is to prove that there is no additional income. Here is a list of commonly used documents to support this position:
Provide Zelle, Venmo, bank statements, and other comparable documents to prove the absence of undisclosed income and to clarify that specific deposits are merely transfers between two bank accounts rather than earnings.
Forms from third parties submitted to the IRS concerning the income you've earned. For instance, for self-employed individuals, Form 1099-K is used to report payments you've received for goods or services throughout the year via credit, debit, or stored value cards, including gift cards (payment cards), as well as payment applications or online marketplaces.
Proof a deposit was a loan or gift, and not income.
Investment statements to show
Business income records to prove no income had been omitted.
Proof of deductions
For deductions, the following types of documents are commonly used to verify the deductibility of expenses.
Bank statements and credit cards statements to support the payment for an expense.
Invoices and receipts that show the date, amount and purpose of the expense.
Canceled checks that have been cleared aby the bank to serve as proof of payment.
Contracts and agreements to verify that certain expenses are legitimate business expenses.
Mileage and travel logs that record the date, purpose and miles driven to prove travel expenses.
Update or recreate your bookkeping records.
It may be necessary to update or recreate your bookkeeping records to prove the amount of business expenses. Accounting and bookkeeping software such as Quickbooks is very useful to organize your business expenditures.
Organize the documentary proof for easy presentation
Presentation is very important. The less work the IRS attorney must do to understand your position, the better is your position.
Frequently Asked Questions
Q: Do I have to go to Washington, DC? A: No, The U.S. Tax Court is located in 74 cities, and your case will be assigned to one you select. Q Is there a fee to file a Petition? A: Yes, the fee is currently $60. The fee may be waived by filing an Application for Waiver of Filing Fee. Q: Can I get a deduction even if I don’t have all of my records to prove deductions? A: Yes, if you have a reasonable basis to determine them the Cohan rule may be used to estimate them. Also, your words may supplement the documentary proof. Q: Is the IRS represented by an attorney? A: Yes, attorneys in the Chief Counsel’s office. Q: Can I have my case determined by the IRS Independent Office of Appeals? A: Yes, immediately after the audit, a 30-day letter was issued giving you the opportunity to petition IRS Appeals. If you failed to petition or were not satisfied with the result at IRS Appeals, the Notice of Deficiency, IRS Letter 3219 or 531, was issued giving you the right to petition the U.S. Tax Court. Once the Notice of Deficiency is issued you can no longer protest IRS Appeals. However, if you did not first go to IRS Appeals, the attorney representing the IRS may seek the assistance of IRS Appeals with settling the case. Q Is it true that the issuance pf the Notice of Deficiency is the beginning of a tax court case? A Yes, in the sense that if you do not file a Petition in the U.S. Tax Court in response you can no longer have your case heard in the tax court.
Need help?
Thomas F. DiLullo & Associates, PC has represented individual and business taxpayer in the U.S. Tax Court in a wide variety of tax cases. Many different issues were involved including unreported income, deductions which were disallowed, losses were, penalties abatements, payroll tax issues, offer in compromise rejections, fraud penalties, civil penalties and others matters. Our clients have included individuals, LLC, Corporations and S Corporations, Partnerships, and unincorporated businesses.
Tom DiLullo and his team offer expert assistance in handling IRS disputes.
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