REG · Tax Procedures and Accounting Issues · 14 practice questions
Tax Court after a deficiency notice: 90 days from mailing
You get Tax Court prepayment review only after a valid notice of deficiency and only if you file within 90 days of mailing (150 days if addressed abroad). Below: one scenario, four versions, one fact changed each time.
Try one first
Hint
Focus on what makes Tax Court different from refund litigation.
Answer B. The U.S. Tax Court is the prepayment forum for deficiency disputes: the controlling requirement is that the IRS issue a valid notice of deficiency and the taxpayer file a timely petition. When the notice is mailed to a U.S. address, the petition generally must be filed within 90 days of the mailing date. If those conditions are met, the taxpayer may litigate in Tax Court without first paying the asserted deficiency.
Why not A: Paying the deficiency and pursuing a refund claim is the route to refund litigation in a U.S. district court or the Court of Federal Claims, not the route into Tax Court for deficiency cases. Tax Court jurisdiction in deficiency matters does not require prior payment.
Why not C: The $50,000 figure relates to eligibility for the Tax Court's small tax case (section 7463) simplified procedure, not to basic access to the Tax Court. Even cases above that amount can be litigated in regular Tax Court after a notice of deficiency.
Why not D: An Appeals conference may be available and may resolve a dispute, but it is not a prerequisite to filing a petition in Tax Court after a notice of deficiency. The required procedural step for Tax Court access is filing a timely petition, not obtaining Appeals review.
Same scenario, one fact changes
Base case
On June 1, Year 1, the IRS mailed a valid statutory notice of deficiency to Rivera’s last known U.S. address for Year 0 income tax. Rivera disputes the deficiency, has not paid, and wants court review before paying. Assume no weekend or holiday extensions and no special relief.
Answer: File a petition with the U.S. Tax Court within 90 days after the notice was mailed.
A valid notice of deficiency triggers Tax Court prepayment jurisdiction. For a notice mailed to a U.S. address, the petition is due within 90 days of the mailing date. The period runs from mailing, not receipt.
Before you open each one, predict the answer.
Change 1Notice was addressed to Rivera’s last known foreign address.
Answer: File a petition with the U.S. Tax Court within 150 days after the notice was mailed.
When the notice is addressed to a person outside the United States, the petition period is 150 days from mailing.
Change 2Rivera was traveling abroad when the notice arrived, but it was mailed to a U.S. address.
Answer: File a petition with the U.S. Tax Court within 90 days after the notice was mailed.
Being abroad does not extend the time. The 150-day rule applies only if the notice is addressed to a person outside the United States.
Change 3Rivera paid part of the asserted deficiency after the notice was mailed.
Answer: File a petition with the U.S. Tax Court within 90 days after the notice was mailed.
Partial payment does not defeat Tax Court deficiency jurisdiction. A timely petition still provides prepayment review of the remaining deficiency.
Change 4The 90/150-day period expired with no petition filed.
Answer: Pay the tax, file a timely administrative refund claim, and then sue for a refund in U.S. district court or the U.S. Court of Federal Claims.
Missing the petition window forfeits prepayment Tax Court review. Refund forums generally require payment and a proper refund claim before suit.
Key points
- A 30-day letter or an Appeals request does not open Tax Court jurisdiction.
- The $50,000 small tax case limit affects procedure, not basic access to Tax Court.
- The petition deadline is measured from the mailing date to the last known address.
- The 150-day rule applies only if the notice is addressed to a person outside the United States.
- Missing the 90/150-day window ends prepayment Tax Court review; the refund route remains.
- A timely Tax Court petition generally suspends assessment and collection of the noticed deficiency until the case is resolved.
How the exam traps you
- Starting the 90-day clock on the date the taxpayer receives the notice. Count from the IRS mailing date on a valid notice to the last known address.
- Invoking the 150-day rule because the taxpayer happened to be abroad when reading the notice. Use 150 days only if the notice was addressed to a person outside the United States.
- Relying on a 30-day letter or Appeals request to preserve court rights. Only a timely Tax Court petition after a valid notice preserves prepayment review.
- Thinking district court can review a deficiency before payment. Refund forums generally require full payment and a timely refund claim first.
Now the same facts as questions
Each question changes one fact from the one before. Watch which change flips the answer.
Question 1
Answer A. Correct. A timely Tax Court petition within 90 days of mailing preserves prepayment review for a notice sent to a U.S. address.
Why not B: Wrong. Appeals is administrative and does not toll or replace the Tax Court filing requirement.
Why not C: Wrong. That is the postpayment refund route and does not provide prepayment review.
Why not D: Wrong. The 150-day period applies only if the notice is addressed to a person outside the United States.
Question 2
Answer B. Correct. A notice addressed to a person outside the United States carries a 150-day petition period.
Why not A: Wrong. The 90-day period applies to notices mailed to U.S. addresses.
Why not C: Wrong. District court is a refund forum and generally requires payment and a refund claim first.
Why not D: Wrong. CDP is triggered by collection notices, not a notice of deficiency.
Question 3
Answer B. Correct. For a notice mailed to a U.S. address, the 90-day period runs from the mailing date.
Why not A: Wrong. Travel abroad does not invoke the 150-day rule unless the notice is addressed to a foreign address.
Why not C: Wrong. Tax Court jurisdiction in deficiency cases requires a timely petition after the notice, not after assessment.
Why not D: Wrong. District court prepayment review is not available for a deficiency; refund suits follow payment.
Question 4
Answer A. Correct. A timely Tax Court petition within 90 days preserves prepayment review despite a partial payment.
Why not B: Wrong. Paying the rest would force the refund path; it is not required to preserve prepayment review.
Why not C: Wrong. The 150-day period depends on a foreign-addressed notice, not on payment status.
Why not D: Wrong. District court is a refund forum and generally requires prior payment and a refund claim.
Question 5
Answer C. Correct. After missing the Tax Court window, the remedy is the postpayment refund route.
Why not A: Wrong. The period runs from mailing; a late petition will be dismissed.
Why not B: Wrong. Refund forums generally require payment before suit.
Why not D: Wrong. Appeals cannot restore expired Tax Court filing rights.
Question 2
Hint
Separate the taxpayers by procedure: one is contesting a deficiency before payment, and the other is choosing among refund-suit forums after full payment and a denied refund claim.
Answer B. A taxpayer who receives a valid notice of deficiency and wishes to litigate without first paying normally petitions the U.S. Tax Court (prepayment forum). A taxpayer who has fully paid the asserted tax and exhausted the administrative refund process may sue for a refund in either the U.S. district court or the U.S. Court of Federal Claims, but only the district court provides a jury trial. Therefore Adams belongs in Tax Court and Blake should choose the U.S. district court to preserve a jury right.
Why not A: This is tempting because the Court of Federal Claims is a proper forum for postpayment refund suits after an administrative denial. It is incorrect here because Blake specifically wants a forum that allows a jury trial, and the Court of Federal Claims does not provide jury trials.
Why not C: Some candidates may recall that district court and the Court of Federal Claims both hear refund suits. It is wrong for Adams because he seeks prepayment review of a notice of deficiency, which points to the U.S. Tax Court, not district court.
Why not D: This distractor reflects confusion about forum availability. Tax Court is generally the prepayment forum for deficiency cases; it is not the appropriate forum for Blake, who already paid and is pursuing a refund after an administrative denial.
Question 3
Hint
Which IRS notice creates a right to prepayment Tax Court review? Pay attention to the mailing‑address rule that determines whether the deadline is 90 or 150 days.
Answer A. A statutory notice of deficiency is the document that permits prepayment litigation in the U.S. Tax Court. Because the notice was mailed to Morgan at a U.S. address, Morgan must file a Tax Court petition within 90 days of the mailing date (the deadline is 150 days if mailed to a foreign address). Failing to file timely generally forfeits the right to prepayment Tax Court review.
Why not B: This distracts because protests to Appeals are commonly used to resolve proposed adjustments during examination. However, once a statutory notice of deficiency is issued, a written protest to Appeals does not preserve the right to prepayment judicial review; a timely Tax Court petition is required to litigate the deficiency before paying.
Why not C: This describes the postpayment refund route, which is a real remedy and tempts candidates who know refund suits exist. It is wrong here because Morgan wants to litigate before paying; the refund path requires payment first and does not preserve prepayment Tax Court review.
Why not D: CDP hearings are an administrative review for certain collection actions (e.g., notices of lien or levy) and thus can tempt those who conflate notices. A notice of deficiency is not a collection notice, so CDP does not preserve prepayment deficiency litigation rights.
Question 4
Hint
First identify the type of IRS notice and Chen's goal (court review before paying); then choose the remedy that preserves prepayment judicial review and note which date starts the filing period.
Answer C. A statutory notice of deficiency entitles the taxpayer to prepayment judicial review in the U.S. Tax Court. For notices mailed to a taxpayer's U.S. address, the taxpayer generally must file a petition within 90 days of the mailing date to preserve that right. Because Chen wants court review before paying, filing a Tax Court petition within the 90‑day period is the correct action; if the deadline is missed, the remaining route is to pay and pursue a refund suit.
Why not A: Why tempting: A CDP hearing is a familiar IRS appeals mechanism, so candidates may conflate collection and deficiency procedures. Why wrong: CDP hearings arise from certain collection notices (for example, lien or levy notices), not from a statutory notice of deficiency; the stem states no collection notice was issued.
Why not B: Why tempting: This describes the legitimate pay‑then‑sue refund route, which does allow later judicial review. Why wrong: It requires the taxpayer to pay first and to exhaust the administrative refund process before suing, so it does not provide the prepayment Tax Court review Chen specifically wants.
Why not D: Why tempting: Appeals can resolve many disputes administratively, making a protest seem like a constructive step. Why wrong: After issuance of a statutory notice of deficiency the principal prepayment judicial remedy is a Tax Court petition; filing an Appeals protest does not preserve the right to prepayment judicial review in Tax Court.
Question 5
Hint
Separate the prepayment deficiency path from the post-payment refund path, and ask which court process matches each year.
Answer A. A valid notice of deficiency gives the taxpayer a statutory right to petition the U.S. Tax Court to redetermine the deficiency without first paying the disputed tax. By contrast, after the tax has been paid and the taxpayer files a refund claim, the appropriate route is generally refund litigation in a refund forum (e.g., U.S. District Court or the Court of Federal Claims) once the statutory waiting period or denial has occurred; six months of IRS inaction after a timely refund claim is typically enough to permit filing a refund suit.
Why not B: This is tempting because both matters began with an examination, but Tax Court jurisdiction depends on the deficiency procedure (notice of deficiency) rather than merely the fact of an examination. Year 2 is a post-payment refund matter and is normally litigated in a refund forum, not Tax Court.
Why not C: This choice reverses the correct frameworks. The Tax Court is the prepayment forum for challenging a notice of deficiency; the full-payment-plus-refund-claim route leads to refund litigation (not Tax Court). A pending refund claim after payment does not create Tax Court jurisdiction for Year 2.
Why not D: This confuses collection due process procedures with the distinct deficiency and refund procedures. A final collection notice pertains to collection challenges, not to the ability to petition the Tax Court on a notice of deficiency or to sue for a refund after payment and the statutory waiting period.
Question 6
Hint
Which forum provides judicial review before the taxpayer pays? Remember the 90‑day deadline for notices mailed to a U.S. address and that Appeals is administrative, not a substitute for timely Tax Court review.
Answer D. A taxpayer who receives a valid notice of deficiency mailed to a last known U.S. address may obtain prepayment judicial review by filing a timely petition in the U.S. Tax Court (90 days from mailing). The Tax Court is the primary prepayment forum; district court and Court of Federal Claims refund suits generally require payment of the tax and a prior administrative refund claim, and only district court refund suits can provide a jury trial.
Why not A: Tempting because the Court of Federal Claims hears federal refund suits against the United States. Wrong because, like district court suits, CFC refund actions normally require payment and a prior administrative refund claim; a notice of deficiency does not confer prepayment CFC jurisdiction and the CFC does not provide a jury trial.
Why not B: Tempting because Appeals is a common administrative route that can resolve disputes without court. Wrong because requesting Appeals does not substitute for filing a timely Tax Court petition if the taxpayer wants judicial review before paying; failing to file within the 90‑day window generally forfeits the prepayment Tax Court remedy.
Why not C: Tempting because paying and suing in district court can allow a jury and is an available refund route. Wrong because district court refund suits require full payment and an administrative refund claim before filing, contrary to Park's stated priority to obtain judicial review before paying.
Question 7
Hint
Which forum does a statutory notice of deficiency ('90‑day letter') open, and is the filing deadline measured from mailing or from receipt?
Answer A. A statutory notice of deficiency (a '90‑day letter') gives a taxpayer the right to prepayment judicial review by petitioning the U.S. Tax Court. For a U.S. taxpayer the petition generally must be filed within 90 days of the mailing date of the notice (the deadline is measured from mailing, not receipt). The Tax Court petition preserves prepayment review; the other options are administrative or postpayment routes.
Why not B: Why tempting: the Office of Appeals resolves many disputes and earlier IRS communications may invite written protests, so Appeals sounds plausible. Why wrong: once the IRS issues a statutory notice of deficiency the proper prepayment remedy is a timely Tax Court petition; filing a protest with Appeals does not preserve prepayment Tax Court jurisdiction.
Why not C: Why tempting: paying and pursuing a refund is a recognized route to judicial review and can ultimately reach the courts. Why wrong: that is a postpayment path and does not preserve the prepayment Tax Court forum that Nolan expressly wants; it also requires filing and exhausting the administrative refund claim process before suing.
Why not D: Why tempting: Collection Due Process (CDP) hearings are a later administrative review step related to collection, so they may appear to offer a forum. Why wrong: CDP applies to collection actions after assessment and does not provide prepayment judicial review of a statutory notice of deficiency.
Question 8
Hint
Decide which notice (the 30‑day Appeals letter or the statutory notice) creates the right to go to Tax Court before paying, then apply the filing deadline for a U.S. address.
Answer C. A valid statutory notice of deficiency (the '90-day letter') is the document that permits a taxpayer to obtain prepayment judicial review in the U.S. Tax Court without first paying the deficiency. For a notice mailed to a U.S. address the petition generally must be filed within 90 days of the mailing (150 days if mailed to an address outside the U.S.). The earlier 30‑day letter simply offers an administrative Appeals conference and does not replace the requirement to file a Tax Court petition to obtain prepayment review.
Why not A: This distractor tempts by mixing administrative and judicial remedies, candidates who conflate Appeals with court review may pick it. It fails because an Appeals conference is an administrative remedy and does not grant prepayment judicial review; only a timely Tax Court petition after a statutory notice yields that right.
Why not B: This is tempting because refund suits generally require payment before suing, and ignoring earlier notices can seem to foreclose other options. It is wrong because the statutory notice of deficiency preserves a prepayment path, Lopez may petition the Tax Court without paying the deficiency first.
Why not D: This distractor appeals to those who know CDP is a post-assessment protection during collection activity. It fails because CDP arises after assessment and a collection action; the statutory notice gives Lopez an immediate preassessment/prepayment route to Tax Court that she can use now.
Question 9
Hint
Determine which event, mailing or receipt, starts the 90‑day Tax Court clock for notices sent to a U.S. address, then consider what forum and steps remain if that 90‑day window has closed.
Answer B. Under IRC §6213, when a notice of deficiency is mailed to a U.S. address the taxpayer has 90 days from the date of mailing to file a petition in Tax Court. The notice here was mailed January 15, so the 90‑day period expired before April 25. Jordan therefore missed the prepayment Tax Court option; his usual alternative is to pay the tax, present an administrative refund claim (IRC §7422), and if necessary sue in federal district court or the Court of Federal Claims.
Why not A: This is tempting because actual receipt often feels like the operative event, but for notices mailed to a U.S. address the Tax Court filing period is measured from the date of mailing under IRC §6213; receipt does not extend the 90‑day deadline here.
Why not C: This distractor tempts by invoking district-court jurisdiction over tax disputes, but district courts are not a substitute prepayment forum for Tax Court, they generally require payment of the disputed tax and presentation of a refund claim (and related procedures) before a refund suit may proceed.
Why not D: This choice is tempting because Appeals is a common administrative path, but completing an Appeals conference is not a jurisdictional prerequisite to filing suit. The dispositive problem here is the missed Tax Court deadline, not a failure to pursue Appeals.
Common questions
Does the 90-day Tax Court deadline run from mailing or receipt?
From mailing. For a valid notice sent to a U.S. address, the 90-day period starts on the IRS mailing date, not when you receive or open the notice.
When does the 150-day rule apply?
Only when the notice of deficiency is addressed to a person outside the United States. Merely being overseas when you read the notice does not extend the time.
What if I miss the 90/150-day deadline?
Prepayment Tax Court review is lost. Pay the tax, file a timely administrative refund claim, and then sue for a refund in U.S. district court or the U.S. Court of Federal Claims.
Practice REG like the real exam
The free ChatCPA simulator: real exam layout, timed testlets, starting with a question on this topic. No account needed to start.
Open the free simulator →More on IRS Procedures
Questions from the ChatCPA bank of 17,658 CPA exam questions, each with a written reason for every wrong answer. ChatCPA is built by Nicholas Miller, CPA (Oregon #14907). How these pages are made. Spot an error? Tell us.