What Happens After IRS Appeals Denies Your Case

You went through the IRS Appeals process. You thought you had a chance. Then the letter arrived: Appeals didn't agree with your position.

Now there's a Notice of Deficiency in your hands, and a countdown has started.

Here's exactly what happens next—and what you can do about it.

What Just Happened: The Appeals Process Ended

When the IRS Examination division proposed changes to your tax return, you had the right to appeal. IRS Appeals is an independent office within the IRS that reviews disputes before they go to court.

Appeals considers:

• The hazards of litigation (the IRS's chance of losing in court)
• Your documentation and arguments
• Settlement possibilities

But Appeals is still the IRS. If they don't agree with you, they don't have to settle.

When Appeals upholds the examination findings—either in full or in part—the case moves to the next stage: a formal Notice of Deficiency.

The Notice of Deficiency: Your Ticket to Tax Court

The document you just received has many names:

• Notice of Deficiency
• Statutory Notice of Deficiency
• 90-Day Letter
• CP3219A or CP3219N

This is not an ordinary IRS letter. Under IRC Section 6212, the IRS must send you this formal notice before assessing the deficiency (the additional tax they claim you owe).

Why does this matter? Because this notice gives you something powerful: the right to challenge the IRS in Tax Court without paying first.

That's what makes Tax Court unique. In any other federal court, you'd have to pay the full amount first, then sue for a refund. Tax Court lets you dispute first, pay later.

For a deeper look at what the notice contains, see You Just Got a 90-Day Letter From the IRS. Here's What It Means.

The 90-Day Clock Is Running

From the date on your Notice of Deficiency, you have exactly 90 days to file a petition with the US Tax Court. If the notice was mailed to an address outside the US, you get 150 days.

This deadline comes from IRC Section 6213, and it cannot be extended:

• The IRS cannot extend it
• The Tax Court cannot extend it
• No one can extend it

If day 90 falls on a weekend or federal holiday, you get until the next business day. But that's the only flexibility you'll find.

What Happens If You Miss It

After the deadline passes:

• The IRS will assess the tax as if you agreed
• You lose access to Tax Court for this dispute
• To challenge the tax, you'll need to pay it first and sue for a refund in federal District Court or the Court of Federal Claims

If you've already missed the deadline, see You Missed the 90-Day Deadline. Now What?.

Your Options Right Now

Option 1: Do Nothing (Agree)

If Appeals reviewed everything and you've decided the IRS is right, you can:

• Sign Form 5564 (Notice of Deficiency Waiver) if included
• Or simply let the deadline pass

The IRS will assess the tax, and collection begins.

Option 2: File a Tax Court Petition

If you disagree—in whole or in part—you can challenge the IRS in Tax Court.

Where to file: DAWSON (the Tax Court's online filing system) or by mail to:

United States Tax Court
400 Second Street, NW
Washington, DC 20217

Filing fee: $60 (fee waivers available)

What you'll need:

• Your Notice of Deficiency (you'll attach a copy)
• Form 4: Statement of Taxpayer Identification Number
• The $60 filing fee
• Your petition (the Tax Court provides a form for self-represented petitioners)

Option 3: Request Settlement Before Filing

Even after receiving a Notice of Deficiency, settlement discussions can continue. The vast majority of Tax Court cases—76%—settle before trial.

Once you file a petition, your case gets assigned to IRS Appeals again—but now in a "docketed case" context. This is often more productive than pre-petition Appeals.

Why? Because now the IRS has the prospect of preparing for trial. The "hazards of litigation" become more real.

The Timeline After Appeals Denial

Should You Represent Yourself?

Around 89% of Tax Court petitioners represent themselves (pro se). The Tax Court has simplified procedures for cases involving $50,000 or less per year (called "Small Cases" or "S Cases").

However, self-represented petitioners face challenges:

• Pro se win rates at trial are significantly lower than represented taxpayers
• Procedural mistakes can undermine valid substantive claims
• The IRS has experienced attorneys on its side

Consider your options:

• Attorneys admitted to Tax Court practice
• US Tax Court Practitioners (USTCPs): CPAs or Enrolled Agents with special certification (fewer than 300 nationwide)
• Low Income Taxpayer Clinics (LITCs): Free or low-cost help for qualifying taxpayers

For help choosing between small case and regular case procedures, see Small Case or Regular Case: Which Should You Choose?.

What About Audit Reconsideration?

Sometimes people ask: "Can I go back to Appeals?"

Generally, no—not through the normal Appeals process. Once Appeals has considered your case and issued a Notice of Deficiency, that administrative process has concluded.

However, Audit Reconsideration remains available if:

• You have new information that wasn't previously considered
• There was a computational error
• You didn't receive proper notice of the audit

Audit Reconsideration happens at the Examination level (not Appeals) and doesn't extend your Tax Court deadline. If you're pursuing reconsideration, you should still file your Tax Court petition on time to preserve your rights.

Key IRC Sections to Know

The Bottom Line

Getting denied at Appeals feels like the end of the road. It's not.

The Notice of Deficiency you received is actually an invitation—a chance to have an independent judge review your case. But that invitation expires in 90 days.

Take action now:

1. Calculate your deadline from the notice date
2. Decide whether to petition Tax Court
3. Gather your documentation if you plan to fight
4. Consider representation for complex cases
5. File before the deadline, even if settlement discussions are ongoing
   Your day in court is available—but only if you claim it in time.

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.