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Can the IRS Raise Your Bill in Tax Court? The IRC 6214 Guide

Yes, the IRS can ask the Tax Court for more tax or new penalties after you petition, but it must plead and prove them. How IRC 6214 works and how to respond.

Liam Williams

Liam Williams

— 42 min read
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You have a notice of deficiency (the "90-day letter") and one worry: if you take it to Tax Court, can the IRS ask for more? Or you have filed, and the IRS's Answer, or a "Motion for Leave to File Amendment to Answer," asks for a bigger number than the notice did.

Yes, the IRS can ask. IRC Section 6214(a) lets the Tax Court decide that you owe more than the notice says, and add penalties the notice never mentioned, if the IRS claims them before the case is decided. But the IRS has to put the claim in a court filing, the Court has to allow it if it comes late, and the IRS carries the burden of proving it.

The bigger risks sit around the rule: a 45-day deadline to respond to new allegations, allegations that become admitted facts when nobody responds, and concessions that hand the IRS the proof it needed.

Where To Start, Depending on What You Are Holding

What Section 6214(a) Says

The provision is one sentence. "The Secretary" in it is, in practice, the IRS:

Except as provided by section 7463, the Tax Court shall have jurisdiction to redetermine the correct amount of the deficiency even if the amount so redetermined is greater than the amount of the deficiency, notice of which has been mailed to the taxpayer, and to determine whether any additional amount, or any addition to the tax should be assessed, if claim therefor is asserted by the Secretary at or before the hearing or a rehearing.

Five things follow from the text.

It is a power, not a result. The Court decides "the correct amount of the deficiency," meaning the extra tax beyond what your return showed. The correct amount can be larger than the notice, smaller, or zero.

It reaches penalties too. "Any additional amount, or any addition to the tax" covers penalties and additions to tax (the Code's label for some penalties, such as those for filing or paying late) that the notice did not include.

The IRS has to ask. The power applies "if claim therefor is asserted by the Secretary." The IRS's litigation manual for its lawyers, the Chief Counsel Directives Manual (CCDM), puts it this way: "in any instance in which an increased deficiency is to be claimed, it must be specifically pleaded." (To plead something is to put it in the formal court papers called pleadings: the petition, the Answer and any Reply.)

The deadline is late, but it is not a free pass. The Tax Court reads "at or before the hearing" broadly. In Law v. Commissioner, 84 T.C. 985 (1985), it said: "Under section 6214(a), this Court has jurisdiction to consider a claim by the Commissioner for an increased deficiency or addition to tax at any time before the entry of a final decision."

But in Estate of Quick v. Commissioner, 110 T.C. 172 (1998), it added: "Section 6214(a) does not, however, give the Commissioner an unqualified right to amend the answer to claim an increased deficiency, addition to tax, or penalty." The Court's rules on amending pleadings decide when a late claim comes in (see When the IRS Asks Permission To Amend).

Small cases are capped. "Except as provided by section 7463" refers to the small tax case rules, covered in Small Tax Cases: The Cap and Its Limits.

What Filing a Petition Changes

Several other rules shape how an increase works once you are in Tax Court.

No second notice for the same year. Once you file a timely petition, IRC Section 6212(c)(1) says the IRS "shall have no right to determine any additional deficiency of income tax for the same taxable year," with listed exceptions: fraud, math or clerical errors, termination and jeopardy assessments, and "as provided in section 6214(a)." So if the IRS wants more for a year you have petitioned, it generally has to ask the Tax Court, in your case.

Collection waits for the decision. While the case is pending, the IRS cannot assess the deficiency in your notice (record it on your account as owed, the step that lets it collect) or collect it by levy until the Court's decision is final (IRC Section 6213(a)). An increase the IRS claims is decided in the same case and assessed only after the decision is final (§ 6215(a), below). The exceptions are jeopardy and termination assessments, which the IRS can make when it believes collection is at risk. Interest keeps running meanwhile (see below). How IRC § 6213 Protects You While Your Tax Court Case Is Pending explains the protection.

Only the years in your case are decided. Under IRC Section 6214(b), the Court considers facts from other years where it needs them to get the years before it right, "but in so doing shall have no jurisdiction to determine whether or not the tax for any other year or calendar quarter has been overpaid or underpaid." Petitioning does not put your other years before the Court, though they stay subject to the IRS's usual audit rules and their own statutes of limitations.

The statute of limitations does not block a pleaded increase. The IRS normally has a limited time to assess more tax, but IRC Section 6503(a) suspends that clock once the notice is mailed, and while a case is on the Tax Court's docket "until the decision of the Tax Court becomes final," plus 60 days. In Bruno v. Commissioner, 72 T.C. 443 (1979), the Court put it plainly: "It is well settled that the Commissioner may claim an increased deficiency at or before trial, even though the statute of limitations has run against additional assessments for the year in issue." (Whether the notice itself came too late is a separate question, covered in Raising the Statute of Limitations in Tax Court.)

The Court's number is the one assessed. Under IRC Section 6215(a), "the entire amount redetermined as the deficiency by the decision of the Tax Court which has become final shall be assessed," and nothing the Court disallowed can be assessed or collected. If the Court finds more than the notice, the larger figure is what you owe. If it finds less, the IRS is held to the smaller one.

Then the year is settled. In Commissioner v. Sunnen, 333 U.S. 591 (1948), the Supreme Court explained that each tax year is a separate claim: "if a claim of liability or non-liability relating to a particular tax year is litigated, a judgment on the merits is res judicata as to any subsequent proceeding involving the same claim and the same tax year." In plain terms, a final Tax Court decision settles that year's tax for both sides, subject to narrow exceptions such as fraud. What Happens After Your Tax Court Decision covers the assessment that follows.

How the IRS Asks for More

The IRS has to claim an increase in the case itself. There are four ways it can, and one way it cannot.

In the Answer

The Answer is the IRS's formal response to your petition. The IRS has 60 days from the date your petition is served to file it (Rule 36(a)). Besides admitting or denying what your petition says, Rule 36(b) requires the Answer to contain "a clear and concise statement of every ground, together with the facts in support thereof, on which the Commissioner relies and has the burden of proof."

That is where an increase appears: as affirmative allegations, numbered paragraphs of facts the IRS says support a larger deficiency or a new penalty. On penalties, the CCDM says: "If a penalty was not included in a statutory notice of deficiency, an attorney may raise a penalty in the answer or amended answer," a decision made "on a case-by-case basis in consultation with the attorney's immediate supervisor."

Rule 41(a) lets a party amend a pleading once without permission, but only early: before a response to it is served, or, if no response is allowed, within 30 days and before the case is on a trial calendar. After that, a party "may amend a pleading only by leave of Court or by written consent of the adverse party, and leave will be given freely when justice so requires." ("Leave" means permission.) The IRS files a motion that must "state the reasons for the amendment" and attach the proposed amendment. Look for a title such as "Motion for Leave to File First Amendment to Answer."

Because Rule 41(a) allows amendment by written consent, the IRS attorney may ask whether you agree, and the CCDM's sample motion for leave tells the Court whether the other side objects. Consent is yours to give or withhold. Consenting means the Court never weighs delay, surprise or prejudice, the points an objection could raise. If you do not consent, the Court decides, using the factors in When the IRS Asks Permission To Amend, and a motion you leave unanswered can simply be granted, as the post-trial motion in Bass was (below).

To Match the Evidence at Trial

Rule 41(b)(1) provides that "Issues not raised by the pleadings but tried by express or implied consent of the parties are treated in all respects as if raised in the pleadings," and lets the Court allow an amendment so the pleadings match the evidence.

That is how your own words at trial can raise your bill. In Bass v. Commissioner, T.C. Memo. 2023-41, a self-represented taxpayer's trial testimony, and evidence the parties stipulated (agreed to) at trial, revealed business income he had not reported; he agreed the amount was $8,863. After trial, the IRS moved under Rule 41(b) to add a further increase based on that evidence. The Court's account: "Petitioner did not file a response to respondent's Rule 41(b) motion, despite our directing him to do so. We will grant respondent's Rule 41(b) motion."

You have more say than Mr. Bass used. If the IRS starts on an issue at trial that was never pleaded, you can object that it is outside the pleadings. The Court may still allow an amendment, and Rule 41(b)(2) says it will do so freely unless the objecting party shows "that the admission of the evidence will prejudice that party's position on the merits," for example because you had no chance to gather records on the new issue. Without an objection, an issue tried with your implied consent is treated as if it had been pleaded (Rule 41(b)(1)). And a post-trial motion like the one in Bass is your chance to respond. What To Expect at Your Tax Court Trial explains how objections work at trial.

By Agreement in a Settlement

A settlement can land above the notice amount. When it does, the decision document says so: the CCDM's sample stipulated decision (the agreed decision both sides sign) for this situation recites that the IRS claims an increased deficiency "pursuant to the provisions of I.R.C. § 6214(a)." Read every figure before you sign. How To Settle Your Tax Court Case explains the documents.

Not for the First Time at the Computation Stage

After an opinion, the Court may have the parties compute the final numbers under Rule 155. Rule 155(c) confines that step "strictly to consideration of the correct computation of the amount to be included in the decision resulting from the findings and conclusions made by the Court," with no consideration given "to any new issues."

The IRS's manual agrees: "a claim for an increased deficiency in tax or penalty over the amount determined in the statutory notice cannot be made for the first time in computations or decision documents filed under Rule 155." It has to come with an amendment to the Answer and a motion for leave, which you can oppose. So if a computation shows more than the notice, check whether the increase was ever pleaded.

That is not a promise that a late amendment will fail. Law noted that where there was no surprise or prejudice, the Tax Court "has been reversed for refusing to allow the Commissioner to amend his answer to claim an increased deficiency, even after the Court has filed its opinion."

Where Increases Come From

The cases show a handful of recurring sources. These are illustrations, not a sign that the IRS re-audits every petition.

Source Case What happened
An item the audit did not touch Bass (self-represented) The notice disallowed business expenses on Schedule C. The Answer also challenged his Schedule A charitable deduction and claimed "an increased deficiency of $11,057 and a proportionate increase in the penalty."
Your own amended return Aulisio v. Commissioner, T.C. Memo. 2024-29 (self-represented CPA) The notice determined a $14,878 deficiency. After he petitioned, the IRS moved to amend its Answer to allege $101,413 of additional income "based on the amount that petitioner reported on his Form 1040X," an amended return he had sent after a CP2000 letter and the IRS never processed. The Court granted the motion.
Your own testimony Bass A further increase after trial, from evidence about unreported business income (above).
A mistake in the notice Witasick v. Commissioner, T.C. Memo. 2024-112 (represented) The notice took the wrong figure from the return, producing a $72,252 adjustment that should have been $120,605. Correcting that and one other item, the amended answer raised the 2000 deficiency from $32,790 to $87,483, with a matching increase in the fraud penalty.
The wrong filing status Roberts v. Commissioner, 141 T.C. 569 (2013) (represented) "Respondent increased the deficiency in an amendment to answer to account for the incorrect filing status used on petitioner's 2008 return."
Penalties the notice left out DeCrescenzo v. Commissioner, T.C. Memo. 2023-7 (represented) "In the Answer, respondent asserted section 6662 accuracy-related penalties for all years at issue."
A fallback position Estate of Ming v. Commissioner, 62 T.C. 519 (1974) (represented) The notice asserted fraud additions to tax. Two weeks before trial, the IRS moved to add late-filing and negligence additions "in the alternative," in case fraud failed.

One more source works differently: the § 6673 penalty for frivolous positions or delay, which the Court itself imposes and which the CCDM says "can be claimed at any time prior to entry of decision." That guide covers it.

Who Has To Prove an Increase

Normally you carry the burden of proving the notice wrong. Increases are one of the exceptions written into the Court's own rule, Rule 142(a)(1):

The burden of proof shall be upon the petitioner, except as otherwise provided by statute or determined by the Court; and except that, in respect of any new matter, increases in deficiency, and affirmative defenses, pleaded in the answer, it shall be upon the respondent.

In Tax Court you are the petitioner and the IRS is the respondent. Roberts states the rule this way: "if the Commissioner raises a new issue or seeks an increase in the deficiency, the Commissioner bears the burden of proof as to the new issue or increased deficiency." Bass applied it to a self-represented taxpayer, "including the proportionate increase in the penalty." Burden of Proof in Tax Court covers the other burden rules.

New Matter or Just a New Theory?

Not everything new in an Answer moves the burden. The Court separates new matter from a new theory. In Achiro v. Commissioner, 77 T.C. 881 (1981), it said:

The assertion of a new theory which merely clarifies or develops the original determination without being inconsistent or increasing the amount of the deficiency is not a new matter requiring the shifting of the burden of proof. ... However, if the assertion in the amended answer either alters the original deficiency or requires the presentation of different evidence, then respondent has introduced a new matter.

In plain English: if the IRS keeps the same adjustment and only offers a better legal explanation that needs no new evidence, the burden stays with you. If the new position raises the number or needs different evidence, the IRS has to prove it. Shea v. Commissioner, 112 T.C. 183 (1999) held the same where the notice "fails to describe the basis on which the Commissioner relies" and the new basis "requires the presentation of evidence that is different."

How broadly the notice is worded matters. In Ax v. Commissioner, 146 T.C. 153 (2016), the notice said the taxpayers "did not establish that the amount shown was (a) insurance expense, and (b) paid." The IRS later added two grounds, and conceded it would bear the burden on one: that the arrangement lacked economic substance.

The other, that the payments were "neither ordinary nor necessary," was not new matter, because the notice, "construed with reasonable breadth," was "broad enough to encompass the later assertion." A broadly worded notice leaves the IRS more room to add theories without taking on the burden.

Ax added that this did "not by any means foreclose petitioners from using discovery, informal and formal, to learn the details of the Commissioner's contentions," which is how you find out what the IRS is relying on (How To Handle Discovery and Pretrial Preparation in Tax Court).

Carrying the Burden Is Not the Same as Losing

"The IRS has the burden" does not mean the IRS loses. In Wayne Bolt & Nut Co. v. Commissioner, 93 T.C. 500 (1989), an accounting-method argument first raised in an amended answer was new matter, so "the burden of proving that there was a change in accounting method is on the respondent." The IRS carried that burden and won the issue.

In Shea, the IRS bore the burden on a community-property argument that was not in the notice, failed to carry it, and the taxpayer kept the benefit of California's community-property law. Both taxpayers had lawyers.

Two Ways the IRS's Burden Gets Lighter

A clerical error in the notice. In Witasick, where the increase rested on correcting a clerical error in the notice, the Court held that "the Commissioner bears only the burden of establishing the clerical or mathematical error." The IRS met it by putting the tax return into evidence.

Your own filings and words. In Aulisio, the IRS's proof of the increase was the taxpayer's amended return, which was part of the stipulation of facts. The Court relied on the rule that "a taxpayer's statements on his or her tax return are admissions that may be overcome only through cogent evidence," adding: "This is true even if the Commissioner does not accept the taxpayer's return for filing." So "respondent has satisfied his burden of proof on these new matters." In Bass, once the taxpayer conceded some of the new items, "respondent has plainly met his burden regarding these items."

That is not a reason to dispute facts you know are true. It is a reason to check each new allegation before you admit it, whether in a Reply, a stipulation or testimony, because the burden protects you only on facts you have not already conceded. The Stipulation of Facts in Tax Court: Rule 91 Explained covers stipulating with care.

One rule runs the other way: new matters you bring into the case remain yours to prove. Aulisio: "Because petitioner raised the NOL and the other deductions as new matters, the burden of proof remains with petitioner to show his entitlement to any deductions for his reported expenses." See the Section 172 net operating loss (NOL) guide.

Penalties Added After You Petition

Who Proves a New Penalty

For any penalty against an individual, IRC Section 7491(c) puts "the burden of production" on the IRS, meaning it must come forward with evidence first. When the penalty first appears in the Answer, Rule 142(a) adds the burden of proof.

In Soni v. Commissioner, T.C. Memo. 2021-137, the Court said the IRS "bears the burden of production with respect to an individual taxpayer's liability for any penalty and the burden of proof with respect to any new penalty pleaded in his answer." Yaryan v. Commissioner, T.C. Memo. 2018-129 said the same of a penalty "asserted for the first time in respondent's answer." Both taxpayers were represented.

Reasonable Cause: What Two 2023 Cases Held

Penalty defenses such as reasonable cause and good faith are normally yours to prove. Two 2023 memorandum opinions held that, for a penalty (or the part of a penalty) first raised in the Answer, the IRS has to disprove them.

  • In DeCrescenzo, the Court explained that the usual rule did not apply: "That is not the case here because the accuracy-related penalties are a new matter and respondent has the burden of proving not only grounds for the penalties but also the absence of any affirmative defenses." The IRS failed to negate the defenses except for parts of three years.
  • In Bass: "Respondent's burden of proof requires that he prove the contrary, i.e., that the additional underpayments reflected in his Answer and First Amendment to Answer were not due to reasonable cause and petitioner did not act in good faith with respect to those portions."

Bass shows what that meant on a single record. Mr. Bass "failed to present persuasive evidence of reasonable cause," so the penalty in the notice, which was his to defend, stood. But the IRS "also failed to introduce any evidence establishing to the contrary," so the penalty increases that the Answer and the amendment had added fell.

Treat this as what the Court held in those cases, not settled law. In Soni, decided in 2021, on a penalty added by an amendment to the Answer, the Court still described the defense as available "if the taxpayers show" reasonable cause and good faith. And the IRS's model answer language, written in 2004 for any petition that says the IRS bears the burden on a penalty (not specifically for penalties first raised in the Answer), "alleges that the petitioner bears the burden of proof with respect to all defenses."

Either way, bring your reasonable-cause evidence. How To Fight the IRS Accuracy-Related Penalty in Tax Court covers what that evidence looks like.

Supervisory Approval Under Section 6751(b)

IRC Section 6751(b)(1) says no penalty "shall be assessed unless the initial determination of such assessment is personally approved (in writing) by the immediate supervisor of the individual making such determination or such higher level official as the Secretary may designate." Section 6751(b)(2) exempts two groups:

  • additions to tax for late filing and late payment (§ 6651) and for estimated tax (§§ 6654 and 6655), and two narrow grounds of the accuracy-related penalty, both tied to charitable deductions: an overstated deduction under § 170(p) (§ 6662(b)(9)) and a conservation-easement deduction disallowed under § 170(h)(7) (§ 6662(b)(10)); and
  • "any other penalty automatically calculated through electronic means."

So a late-filing addition added in an Answer needs no supervisor's approval. An ordinary accuracy-related penalty, an economic-substance penalty (§ 6662(b)(6)) or a fraud penalty that an IRS lawyer adds does.

The deadline. For "a penalty that the Commissioner raises in the Tax Court after a petition (see section 6214(a) of the Code)," the 2024 regulation, 26 C.F.R. § 301.6751(b)-1(d), requires written approval from the immediate supervisor (or a designated higher level official) "no later than the date on which the Commissioner requests that the court determine the penalty." It applies to "penalties assessed on or after December 23, 2024." The writing can be electronic, and in one of the regulation's examples, the supervisor approves by signing the Answer before it is filed.

What to look for. The CCDM tells IRS lawyers that when they raise a penalty in an Answer, "the attorney's immediate supervisor must sign the answer or amended answer, and the answer or amended answer must identify the supervisor's signature as the written supervisory approval." So read the signature block of any Answer that adds a penalty. If the approval is not there, you can ask for it in discovery; The Penalty Defense That Costs You Nothing: § 6751(b) explains how.

Timing in practice. In Bass, the approval for the Answer's penalty increase was in the record, signed by the supervisor before the Answer was filed. For the post-trial increase, the IRS attached approval emails to its motion after the record had closed, and the Court explained: "Absent a motion to reopen the record, a party may not interject new or additional evidence into the record as attachments to pleadings or briefs." The IRS had not met its burden of production for that piece.

A bill to watch. H.R. 5346, which would move the approval deadline earlier, passed the House in December 2025 and is not law; the § 6751(b) guide tracks it.

The IRS's Own Limits on New Issues

The IRS's lawyers work under written instructions about when to ask for more. CCDM 35.4.1.2 defines a "new issue" as one "raised in the answer or amended answer which was not one of the adjustments or positions shown in the notice," including "all issues which result in increased deficiencies." Then it sets a limit:

In general, respondent's counsel will not raise new issues, unless the grounds are substantial and the potential effect on tax liability is material. "Substantial" is defined as strong, possessing real merit. "Material" is defined as having real importance and great consequence.

Items not in the notice may be raised "only if the grounds are substantial, the effect on tax liability is material, and there is a sufficient basis in available facts to sustain the Commissioner's position on the item." Another section adds that "an increased deficiency should not be claimed in the original or amended answer unless the evidence supporting such claim is in the hands of the attorney or can be readily obtained."

On timing, the same manual says: "Normally, new issues should not be raised after the case has been set for trial. The court may be inclined to deny leave to raise it, because petitioner is not likely to have enough time to prepare a defense. If the case is continued, this limitation will no longer apply." And if Counsel sends a docketed case (one pending in the Tax Court) back to the IRS's examiners to develop more facts, "Petitioners or their representatives may not be contacted by the examining agent or officer in connection with this further factual development, and no administrative summons should be issued."

Appeals. The IRS Independent Office of Appeals has its own rule. Policy Statement 8-2 says: "Appeals will not raise new issues." For docketed cases, IRM 8.4.1.9.3 adds: "Appeals will not raise a new issue in a docketed case. However, Appeals will consider new issues the government raises in its pleadings."

Under IRM 8.6.1.7.2, the Appeals officer's "consideration of a new issue in a docketed case will take into account that the government has the burden of proof." So Appeals will not go looking for more, but anything IRS Counsel has pleaded is part of the settlement discussion, valued with the IRS's burden in mind. What To Expect at Your IRS Appeals Conference covers the conference itself.

What these rules are, and are not. They are the IRS's internal instructions to its own staff, and several of the CCDM sections quoted here date from 2004. They give you no enforceable right, so do not expect an increase to fail just because a manual section was not followed. Their value is practical: they tell you what the IRS lawyer is supposed to have in hand before asking for more, and how Appeals will weigh it.

How To Read the Answer and Check the Numbers

The CCDM's own drafting rules and sample answers show where to look.

  1. The prayer. The Answer closes with a prayer for relief, a paragraph beginning "WHEREFORE, it is prayed," that asks the Court for specific results. The CCDM says that where the IRS has the burden of proof "(including increased deficiencies)," the prayer "should contain a request as to each such item." A claim for more may cite § 6214(a); one of the CCDM's sample answers uses the words "claim for which is hereby made pursuant to the provisions of I.R.C. § 6214(a)." Not every Answer will use those exact words.
  2. The affirmative allegations. In the CCDM's sample answers they come after the paragraph-by-paragraph response and begin "FURTHER ANSWERING the petition." In a regular case, each one needs an admission, a denial, or a statement that you lack the knowledge to answer, in your Reply.
  3. The amount in dispute. When the IRS responds to the amount in dispute stated in your petition, its manual says that figure should be the notice amounts in controversy "plus any increased deficiency or liability claimed in the answer." Check that response too.
  4. Penalties that were not in the notice, and whether the supervisor's signature is identified as the § 6751(b) approval, unless the penalty is one the statute exempts.
  5. The title of anything that follows: "Amended Answer," "Amendment to Answer," or "Motion for Leave to File Amendment to Answer." Each amended answer or amendment starts a new Reply period.

Checking the IRS's arithmetic. An increase is only as good as its computation, and notices contain errors too (the one in Witasick understated the tax). A few checks:

  • Start from the notice's own computation of tax and penalties, and apply only the change the Answer alleges. If the Answer's figure is bigger than that change explains, ask the IRS attorney (named at the end of the Answer) for the computation behind it.
  • A percentage penalty that was already in the notice should rise only in proportion to the added underpayment: 20% of it for the usual accuracy-related penalty, 75% for fraud. A penalty the notice did not include is a new claim the IRS has to plead and prove.
  • Add it up, carefully. In Bass, the notice claimed $6,307 of tax and a $1,261 penalty. The Answer asserted "an increased deficiency of $11,057" and a proportionate penalty. By the numbers, that figure must be the new total, not an addition (the only new item, an $18,899 deduction, could not have added $11,057 of tax), so the tax rose $4,750 and the 20% penalty to about $2,211, taking the IRS's claim from about $7,568 to about $13,268, before interest. Before you add an Answer's figure to the notice, check whether it is a new total or an addition.
  • Check each new income figure against your Wage and Income transcript, and each item against your return as filed. How To Get and Read Your IRS Transcripts explains which transcripts show what.
  • Look for double counting: an increase that re-adjusts something the notice already adjusted.
  • Remember interest, which runs on top of any increase (below).

The Reply: Your 45-Day Deadline

This section is about regular cases. Small cases follow a different rule, covered at the end of the section.

The deadline. Rule 37(a) gives you "45 days from the date of service of the answer within which to file a reply, or 30 days from that date within which to move with respect to the answer." (To "move" is to file a motion.) The same periods apply "with respect to an amended answer or amendments to the answer," unless the Court directs otherwise, so each new amendment starts a new 45 days. Settlement talks with the IRS attorney or Appeals do not pause the clock.

When the clock starts. The 45 days run from service, not from the day the Answer reaches you. If you use DAWSON's electronic service, a paper filed there is served the day it is filed, the date shown on your docket record. If you get papers by mail, service is complete on the day they are mailed, the date on the certificate of service attached to the Answer (Rule 21(b)(2)). To count, skip the day of service and count every calendar day. If the 45th day is a Saturday, Sunday or legal holiday, the deadline moves to the next day that is not, and electronic filing stays open until 11:59 p.m. Eastern Time on the last day, while for a paper filing the last day ends when the Clerk's Office is scheduled to close (Rule 25(a)).

What it must say. Under Rule 37(b), for each material allegation on which the IRS has the burden of proof, the Reply "shall contain a specific admission or denial." If you do not know whether an allegation is true, you can say so, and "such statement shall have the effect of a denial."

The Reply also states "every ground, together with the facts in support thereof, on which the petitioner relies affirmatively or in avoidance of any matter in the answer on which the Commissioner has the burden of proof." That is where you set out, for example, reasonable cause for a new penalty. Number your paragraphs to match the Answer's.

What a Reply looks like. There is no official form; you draft it yourself. Use the same caption as your petition (your name as petitioner, the Commissioner of Internal Revenue as respondent, and your docket number), title it "Reply," and respond to the Answer paragraph by paragraph using its numbers: for example, "1. Admits." "2. Denies." "3. Petitioner is without knowledge or information sufficient to form a belief as to the truth of this allegation." Then set out the facts you rely on, such as your reasons for reasonable cause, and date and sign it, with your name, mailing address, email address and telephone number typed or printed beneath your signature. It must follow the Court's formatting rule, Rule 23. Filed through DAWSON, it is served on the IRS attorney automatically. Filed on paper, it also has to be mailed or delivered to the IRS attorney named at the end of the Answer, with a certificate of service (Form 9). A Reply answers the Answer or an amendment to it; a motion gets a separate response, by the date the Court sets.

If you file one. Rule 37(c): "Where a reply is filed, every affirmative allegation set out in the answer and not expressly admitted or denied in the reply shall be deemed to be admitted." A Reply that skips a paragraph admits it, so address every one.

If you file nothing. The affirmative allegations "will be deemed denied unless the Commissioner, within 45 days after expiration of the time for filing the reply, files a motion that specified allegations in the answer be deemed admitted. That motion may be granted unless the required reply is filed within the time directed by the Court."

How the Deemed-Admission Sequence Unfolds

The CCDM tells IRS lawyers to try first: "Petitioner or petitioner's counsel should be called in an attempt to secure a reply; or a letter should be sent," warning that a motion will follow. A call or letter about your Reply is a warning to act on.

Then comes the motion, and the Court can set a final date. An order in Pinder v. Commissioner, No. 4068-24 (T.C. July 21, 2026) recites the sequence. The allegations there were about whether the petition was filed on time, not about an increase, but the mechanics are the same.

The IRS moved under Rule 37(c), and the Court ordered a Reply and "advised petitioner that, if such reply was not filed as directed, respondent's motion would be granted and the affirmative allegations set forth in the First Amendment to Answer would be deemed admitted for purposes of this case." No Reply was filed, and the motion was granted.

Estate of Ming followed the same path against taxpayers who had a lawyer. The IRS's Answer alleged fraud, no Reply was filed, and the Court granted, in part, the IRS's motion to deem the undenied allegations admitted.

Why it matters. A deemed admission is a fact the IRS no longer has to prove, so the burden that was protecting you is satisfied by silence. The CCDM tells IRS lawyers to seek admission even of conclusory allegations, because "Failure to respond to the conclusory allegation may, in the appropriate circumstances, tip the scales in favor of finding fraud in a motion for summary judgment."

If you need more time, or missed the 45 days. You can ask for more time before the 45 days run out: under Rule 25(b), the Court may extend a deadline "for good cause" when the request comes in time. Once the 45 days have passed, Rule 25(b) still allows an extension "on motion made after the time has expired if the party failed to act because of excusable neglect," so a late Reply can be filed together with a motion asking the Court to accept it, without waiting for the IRS's motion. And if the Court has ordered a Reply by a date, that date controls: under the last sentence of Rule 37(c), a Reply filed by the date the Court directs can still head off the motion. What Happens After You File Your Tax Court Petition covers the pleading stage, and Common Tax Court Motions and How To Respond covers formatting papers and responding to motions.

Small Tax Cases: No Reply Unless Ordered

In a small tax case, Rule 173(c) reverses the default: "A reply to the answer shall not be filed unless the Court otherwise directs." Without such an order, the deemed-admission motion is off the table, "and the affirmative allegations of the answer shall be deemed denied." The CCDM tells IRS lawyers: "Generally, T.C. Rule 37 motions are not to be filed in Small Tax Cases."

That does not stop an S-case Answer from claiming more. The IRS still files an Answer (Rule 173(b)), and it still has to prove any increase at trial. If the Court does order a Reply, file it by the date in the order.

Without a Reply, your defenses to the new items, such as reasonable cause, come out at trial instead. Gather your evidence on each new item, and set out your position in a pretrial memorandum, which the Court's standing pretrial order asks for in small cases too (How To Write Your Tax Court Pretrial Memorandum).

When the IRS Asks Permission To Amend

A motion for leave to amend is your chance to object. In Estate of Ming, the Court said that objecting to the amendment, not withdrawing the petition, is a petitioner's remedy (see Can You Withdraw Your Petition?).

What the Court Weighs

Rule 41(a) says leave "will be given freely when justice so requires." Within that, Estate of Quick lists the main questions: "We consider, among other factors, whether an excuse for the delay exists and whether the opposing party would suffer unfair surprise, disadvantage, or prejudice if the motion to amend were granted."

Law explained the purpose: "If there is evidence of surprise or substantial disadvantage to the petitioner, the Commissioner's motion to amend should be denied because the purpose of section 6214(a) is to give the petitioner a fair opportunity to answer and resist the claim before it is considered by the Court." And Pagel, Inc. v. Commissioner, 91 T.C. 200 (1988) named what weighs most: "Of key importance in evaluating the existence of prejudice is the amount of surprise and the need for additional evidence on behalf of the party opposed to the new position."

"Prejudice" means unfair, not just harder. Ax is the clearest statement of what does not count:

The question of prejudice under Rule 41(a) is not simply whether an amended pleading that includes the proposed new issues would make the case harder or more expensive for the other party than a pleading that lacks those issues. Rather, the question is whether the addition of those new issues by a later amendment, rather than by inclusion in the initial pleading, works an unfair disadvantage to the other party.

An amendment sought "on the eve of trial," leaving the other side without "fair notice and an opportunity to prepare," can be plainly prejudicial. "However, where instead the non-moving party is given adequate time (such as by a continuance of trial) to respond to the new pleading, there is no prejudice (or any prejudice is cured)." A continuance is a postponement of the trial.

The IRS is not limited to the notice's reasons. The taxpayers in Ax argued that administrative law barred the IRS from adding grounds the notice did not state. The Court disagreed. The opinion's syllabus sums up the holding: "in a deficiency case, R [the IRS] may plead grounds not in the NOD [the notice of deficiency]." So an objection has to be about fairness and timing, not about the new ground's absence from the notice.

How These Motions Have Turned Out

  • Denied: Law (1985). After trial, and after the taxpayers had filed their final brief, the IRS sought to add a claim for a higher interest rate under a provision Congress enacted after the trial. "The petitioners would be severely prejudiced if we were to permit the Commissioner to raise this new issue so late in the proceedings." (Represented.)
  • Granted with more time: Witasick (2024). "The Court concluded that the amendment had a reasonable basis, that it would inject no new factual issues into the case, and that any possible risk of prejudice to petitioners would be cured by the Court's granting their request for a continuance." (Represented.)
  • Granted before trial: Ax (2016). "Because no trial date has yet been set, petitioners have ample time to prepare to resist the Commissioner's new contentions." (Represented.)
  • Granted, increases included: Estate of Quick (1998). The IRS sought increased deficiencies of $97,033 and $114,768 and larger accuracy-related penalties. The motion came before a final decision and answered an argument the taxpayers themselves had raised. The Court granted it and added: "The burden of proof as to new matters and increased deficiencies pleaded in the amended answer will be upon respondent." (Represented.)

Responding to a Motion for Leave

The Court will set a date for your response. The cases suggest what a useful response covers:

  • Timing: whether a trial date has been set, and how close it is.
  • What you would need to do: the records, witnesses or outside parties you would need to meet the new claim, and how long that would take. Under Ax, extra cost or effort alone is not prejudice; having no fair chance to prepare in the time left can be.
  • Delay: whether the IRS had the information all along and offers no reason for raising it now (Estate of Quick's "excuse for the delay").
  • A fallback: if the Court grants leave, more time to prepare, as in Witasick.

Whatever happens, the IRS still has to prove what it adds, and in a regular case you get a new 45 days to reply to the amendment (Rule 37(a)). Common Tax Court Motions and How To Respond has a step-by-step checklist for any response.

Small Tax Cases: The Cap and Its Limits

If you chose small tax case procedures (an "S case"), IRC Section 7463(c) caps what the Court can decide:

In any case in which the proceedings are conducted under this section, notwithstanding the provisions of sections 6214(a) and 6512(b), no decision shall be entered redetermining the amount of a deficiency, or determining an overpayment, except with respect to amounts placed in dispute within the limits described in subsection (a) and with respect to amounts conceded by the parties.

The limit is $50,000 per year, and under § 7463(e) the amount in dispute "includes additions to the tax, additional amounts, and penalties." So while your case stays an S case, the Court cannot decide a deficiency above the cap, except for amounts the parties concede. An increase that keeps a year's total within the cap is fully in play. In a regular case there is no cap: the limit is whatever the IRS pleads and proves.

But the S label can come off.

  • Under § 7463(d), you or the IRS may ask to discontinue small-case procedures at any time before the decision becomes final. The Court may agree if it finds "reasonable grounds for believing that the amount of the deficiency placed in dispute, or the amount of an overpayment, exceeds the applicable jurisdictional amount" and that "the amount of such excess is large enough to justify granting such request."
  • Under Rule 171(d), "The Court, on its own or on motion made at any time before the trial commences, may issue an order directing that the small tax case designation be removed."
  • CCDM 35.1.3.3 tells IRS lawyers: "In cases where the deficiency (including penalties and additions to tax) exceeds the statutory amount for a given year, respondent should move to remove the 'S' case designation."

Bruno shows how it plays out. The Brunos chose small-case procedures for a $779.20 deficiency for 1974. More than two years after they petitioned, the IRS found unreported dividends that brought the total to $6,177.94, above the $1,500 small-case limit of the time, and moved both to remove the S designation and to amend its Answer. Their lawyer did not object to removing the S designation, and both motions were granted.

The Brunos then moved to strike the amendment, arguing that their S election limited the case and that the statute of limitations had run. The Court denied the motion: "In a regular case, the petitioner has no right to restrict the trial to the issues presented by him, nor does he have a right to restrict the deficiency considered by the Court to the amount placed in dispute by him."

The practical point: if the IRS moves to remove S status, the time to object is while that motion is pending. Under § 7463(d), an objection can go to both findings the Court has to make: whether there are reasonable grounds to believe the amount exceeds the limit, and whether the excess is large enough to justify the change. Once the case is a regular case, § 6214(a) applies in full, and the S-case exception from the Reply rule no longer applies, so check the Court's order for a Reply date. Small Case or Regular Case: Which Should You Choose? covers the election itself.

Can You Withdraw Your Petition?

No. Once you file a timely deficiency petition, you cannot take it back in order to pay and sue in another court.

In Dorl v. Commissioner, 57 T.C. 720 (1972), a self-represented taxpayer asked to move her case to federal district court for a jury trial. The Court refused: "It is now a settled principle that a taxpayer may not unilaterally oust the Tax Court from jurisdiction which, once invoked, remains unimpaired until it decides the controversy." The Second Circuit affirmed in Dorl v. Commissioner, 507 F.2d 406 (2d Cir. 1974), calling it "elementary, although unfortunately not well known to the layman," that a timely petition gives the Tax Court exclusive jurisdiction and bars a later refund suit in district court.

Estate of Ming is the case closest to the worry behind this guide. Two weeks before trial, the IRS moved to add penalties in the alternative. The taxpayers moved to withdraw their petition so they could pay and sue for a refund before a jury, arguing that they would never have come to Tax Court had they known. The Court denied the motion:

Petitioners' argument that they would not have invoked the jurisdiction of this Court had they known at the time they filed their petition that respondent would claim additions to tax under sections 6651 and 6653(a) does not help them. Having once filed their petition in this Court, their remedy, if any, would be by objection to the amendment to respondent's answer raising these alternative issues.

Behind the rule is a statute. Under IRC Section 7459(d), when a deficiency case is dismissed for any reason other than lack of jurisdiction, the dismissal "shall be considered as its decision that the deficiency is the amount determined by the Secretary." So even if the Court had let the Ming taxpayers out, the result would have been a decision for the full notice amount, not a fresh start in another court.

The rule is specific to deficiency cases. In Wagner v. Commissioner, 118 T.C. 330 (2002), the Court let taxpayers dismiss a collection case and explained: "We distinguish this dismissal from our jurisprudence that holds that taxpayers may not withdraw a petition under section 6213 to redetermine a deficiency."

What Walking Away Does

Ignoring the case does not end it. A petitioner who stops taking part can be held in default or have the case dismissed under Rule 123, and the resulting decision "shall operate as an adjudication on the merits" (Rule 123(d)).

The floor is the notice amount (§ 7459(d)), and it can go higher. The IRS's manual, CCDM 35.3.1.12, tells its lawyers that "The effect of a default judgment is to deem admitted all well-pleaded affirmative allegations in the answer," though "a mere general allegation that the petitioner is liable for the fraud penalty is not sufficient to satisfy the burden of proof." So an increase pleaded with specific facts can end up in a default decision, and Rule 123(a) lets the Court enter one "upon such terms and conditions as the Court may deem proper."

The alternatives are all inside the case: oppose the amendment, file a Reply, make the IRS prove what it added, or settle. Once an increase has been pleaded, ending the case at the notice amount without a trial takes the IRS's agreement in a settlement; conceding the notice's own adjustments still leaves the pleaded increase for the IRS to prove. Common Tax Court Motions and How To Respond covers defaults and how to ask the Court to set one aside.

Should This Stop You From Filing?

If you are holding a notice and deciding, here is the picture the sources support.

How often the IRS asks for more is not published. The IRS Data Book's tables on the Tax Court work of Chief Counsel (the IRS's lawyers), the IRS's litigation manuals and the National Taxpayer Advocate's reports do not say how many Answers claim more than the notice, so this guide does not guess.

Filing does not, by itself, make the bill bigger. The IRS can ask for more, but only by pleading it and proving it. Its manual tells its lawyers to raise new issues only on substantial grounds, with a material effect and evidence in hand, and the Court weighs fairness before allowing late additions. The same case can also end with the Court finding that you owe less, or nothing.

Four more things to weigh:

  • Filing pauses collection. Until the decision is final, the IRS cannot assess or levy for the deficiency in the case, though interest keeps running (What Filing a Petition Changes).
  • Petitioning part of the notice does not wall off the rest of the year. You can dispute some adjustments and accept others, but the IRS can still raise other items for the same year in its Answer, as it did in Bass (Where Increases Come From).
  • A small case caps the amount in play, with limits. If your dispute is $50,000 or less per year, small-case procedures cap what the Court can decide, but the IRS can ask to remove the designation if the real amount is higher, and a small-case decision cannot be appealed (IRC Section 7463(b)). See Small Tax Cases: The Cap and Its Limits.
  • Filing is a one-way door. You cannot withdraw a deficiency petition, and a dismissal is a decision for the full notice amount (Can You Withdraw Your Petition?).

Not filing has its own cost. If you do not petition within 90 days of the notice (150 days if it is addressed to you outside the United States), IRC Section 6213(c) says the deficiency in the notice "shall be assessed, and shall be paid upon notice and demand." If the deadline has already passed, see You Missed the 90-Day Deadline. Now What?

Not filing does not lock the year, either. The bar on a second notice in § 6212(c)(1) applies only if "the taxpayer files a petition with the Tax Court." Without a petition, what limits a later look at the year is the assessment statute of limitations and the IRS's own policy against reopening closed examinations (Policy Statement 4-3), which has exceptions, fraud among them.

Paying and suing for a refund does not avoid the question. A refund claim puts the whole year in play too. In Lewis v. Reynolds, 284 U.S. 281 (1932), the IRS found another error in the return while reviewing a refund claim, and the Supreme Court held that although "the statute of limitations may have barred the assessment and collection of any additional sum, it does not obliterate the right of the United States to retain payments already received when they do not exceed the amount which might have been properly assessed and demanded." Tax Court vs. District Court vs. Court of Federal Claims compares the forums.

A rough way to gauge your own risk. This is practical reasoning, not a legal rule. Before you file, read your return for the year the way the IRS's lawyer will: deductions the notice did not adjust (the Answer in Bass reached a Schedule A deduction the notice never touched), income on your Wage and Income transcript that the notice did not use, anything you filed later for that year, such as an amended return (the source of the increase in Aulisio), your filing status (the source in Roberts), and the notice's own arithmetic (the error in Witasick understated the tax). If you find something, a Low Income Taxpayer Clinic or another adviser can help you weigh it before the deadline, including before you file anything new for that year.

You Just Got a 90-Day Letter From the IRS and How To File Your Tax Court Petition cover the next steps.

Interest, Settlement, and the Other Direction

Interest. A larger deficiency carries more interest, from the start. Under IRC Section 6601(a), interest on unpaid tax runs from the last date prescribed for payment, which for individual income tax is the return's original due date, "to the date paid." So an increase pleaded years into a case carries interest back to that due date, not from the date of the Answer. Interest on an accuracy-related or fraud penalty, and on a late-filing addition, also runs from the return's due date (including extensions) under § 6601(e)(2)(B).

One exception can help. If you filed on time (including extensions) and the IRS did not tell you about an item, and the basis for it, within 36 months after the later of your filing date and the original (unextended) due date, IRC Section 6404(g) suspends interest on that item from the end of the 36 months until 21 days after the IRS gives that notice. Fraud and some other cases are excluded. Can You Get IRS Interest Removed? The § 6404 Abatement Guide explains how it works.

A deposit under IRC Section 6603 can stop interest on an amount you expect to owe: "To the extent that such deposit is used by the Secretary to pay tax, for purposes of section 6601 (relating to interest on underpayments), the tax shall be treated as paid when the deposit is made." A deposit not used to pay tax is returned if you ask in writing (§ 6603(c)), except where the IRS finds collection is in jeopardy. How Interest Works on Your IRS Tax Debt explains how to designate a deposit.

Settlement. An increase in the Answer becomes part of what is negotiated, and Appeals values it knowing the government carries the burden (see The IRS's Own Limits on New Issues). Most (76%) of Tax Court cases close by formal settlement, and more than 99% end without a trial on the merits. A settlement above the notice amount puts the larger figure in the decision document, as By Agreement in a Settlement explains.

The other direction. The Court's power runs both ways. Under IRC Section 6512(b)(1), if it finds that you overpaid, it can determine the overpayment, to be credited or refunded once the decision is final, within the payment-timing limits of § 6512(b)(3). Any new item you raise to get there is yours to prove, as Aulisio shows, and adding one after the Answer has been served means amending your petition with the IRS's written consent or the Court's leave (Rule 41(a); see Amending the Petition).

What To Do Now

If you have not petitioned yet: the deadline is 90 days from the date of the notice (150 days if it is addressed to you outside the United States). Do the risk check in Should This Stop You From Filing?, decide between a small and a regular case, and get advice early if you find something. The steps below are for after you file.

  1. Find your deadline. In a regular case, count 45 days from the date the Answer was served (the filing date if you use DAWSON's electronic service, the mailing date on the certificate of service if you get papers by mail), and again from service of any amended answer or amendment. If you need more time, ask the Court before the period runs out (Rule 25(b)). If the Court orders a Reply by a date, that date controls. In an S case, no Reply is due unless the Court orders one.
  2. Read the end of the Answer first. The "WHEREFORE" prayer and the "FURTHER ANSWERING" paragraphs show anything new.
  3. Compare every number with the notice: each year's deficiency, each penalty, and any penalty the notice did not include.
  4. Reply to every affirmative allegation in a regular case. Admit what is true, deny what is not, say when you lack the knowledge to answer, and state defenses such as reasonable cause. If you file on paper, serve a copy on the IRS attorney with a certificate of service; filing through DAWSON serves it for you.
  5. Answer any motion by the date the Court sets. For a motion for leave to amend, explain concretely what you would need to meet the new claim and how long it would take, and ask for time in the alternative. For a motion to remove S status, that motion is the time to object.
  6. Check new penalties for § 6751(b) approval unless the penalty is exempt. Look at the Answer's signature block, and ask for the approval record in discovery if it is missing.
  7. Check before you concede. Anything you admit, stipulate, testify to or file for the year can become the IRS's proof. If the IRS serves requests for admission, each one is deemed admitted unless, within 30 days after the request is served (the mailing date, if it came by mail), you serve a written answer or objection on the IRS attorney and file it with the Court (Rule 90(c)). Get advice before filing an amended return for a year that is in the case; How To File an Amended Return explains why a 1040-X works differently once you are in Tax Court.
  8. Plan for interest. A § 6603 deposit can stop interest on an amount you expect to owe.
  9. Get help early if the increase is large, adds a fraud penalty, or pushes the case past the small-case limit.

Get Help

In the most recent National Taxpayer Advocate comparison, represented petitioners prevailed at trial in whole or in part about 23% of the time, versus about 12% for those who represented themselves.

If your income is at or below 250% of the poverty line (about $39,900 for a one-person household, plus $14,200 for each additional member) and the amount in dispute is at or below $50,000 per year, a Low Income Taxpayer Clinic may represent you for free or at low cost. For paid options, see When and How To Get Professional Help With Your Tax Dispute. And at many trial sessions, volunteer attorneys and clinic lawyers help unrepresented petitioners for free; What To Expect at Your Tax Court Trial explains how to find them.

Resources

Statutes and regulations:

Tax Court Rules:

IRS guidance (internal instructions to IRS staff; they create no rights for taxpayers):

Cases cited:

Companion articles on TaxCourtHelp:

This article is for informational purposes only and does not constitute legal or tax advice. For advice specific to your situation, consult a qualified tax professional or attorney.

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TaxCourtHelp.com is not affiliated with the United States Tax Court or any government agency. This site provides general information only and does not constitute legal or tax advice.