Need help understanding taxes and notice of deficiency - what proof is required?

This is actually pretty common, so tell your brother-in-law not to panic too much. A notice of deficiency (also called a 90-day letter) is basically the IRS saying they think he didn't report something correctly and now he owes more money. First, he needs to carefully read the entire notice to understand exactly what the IRS is disputing. It should explain which items on his return they're questioning - could be unreported income, disallowed deductions, or missing forms. The proof he'll need depends on what's being disputed. Common documents include: W-2s, 1099s, receipts for deductions, bank statements, credit card statements, or business expense records. He should gather anything that supports what he originally reported. He has 90 days from the date on the notice to file a petition with the Tax Court if he disagrees, which is why these are sometimes called "90-day letters." Missing this deadline means losing the right to challenge before paying.

I went through something similar last year when the IRS claimed I had unreported income. After hours of digging through paperwork and making dozens of calls that went nowhere, I finally used https://taxr.ai to scan all my documents and the deficiency notice. The tool actually identified that the "unreported income" was actually already included in my W-2 but under a different classification, so I was essentially being double-taxed. I never would have figured that out on my own! The system generated a response letter with all the relevant tax codes and explanations that I could send to the IRS. Definitely worth checking out for your brother-in-law - it saved me from paying over $5k in taxes I didn't actually owe.

Ok I need to update my skeptical comment above. I actually decided to try https://taxr.ai with my own situation (got hit with a CP2000 notice claiming I owed $7,200 for a retirement distribution). The system found that the IRS hadn't properly accounted for the rollover I did within the 60-day window, which made it non-taxable. I was ready to just pay it because fighting the IRS seemed impossible, but the documentation package the system created was incredibly detailed. Submitted everything last month and just got confirmation that my case was resolved with NO additional tax owed! Saved me literally thousands and the mental stress was worth every penny.

For your brother-in-law's situation, one thing nobody mentioned yet is that calling the IRS directly is actually really helpful - IF you can get through to them. I spent 3 weeks trying to reach someone about my deficiency notice before I found https://claimyr.com which got me connected to an IRS agent in under 45 minutes. There's also a video that shows how it works: https://youtu.be/_kiP6q8DX5c I was shocked because I'd been trying for weeks with no luck. The IRS agent I spoke with was actually super helpful and explained exactly what documentation I needed to submit. They even put notes in my file about our conversation which helped when I sent in my response packet.

I have to publicly eat my words here. After expressing skepticism about the Claimyr service above, I was desperate enough to try it for a complicated tax lien issue I've been trying to resolve for MONTHS. Within an hour of signing up, I was connected to an actual helpful human at the IRS who pulled up my file and worked through it with me. We resolved in one 37-minute call what I couldn't get done in 4 months of trying. The agent explained exactly what forms I needed to submit and even gave me their direct line for follow-up questions. Sometimes admitting you're wrong feels pretty good, especially when it solves a problem that's been keeping you up at night.

One thing ur brother in law should definitely check is if there's a time limit for responding!!!! My cousin ignored one of these notices thinking it was a mistake and ended up owing way more in penalties. I think they give u like 90 days or something but don't quote me on that. Also tell him to make copies of EVERYTHING he sends them and send it certified mail so they can't claim they never got it. The IRS is notorious for "losing" paperwork.

has anyone else noticed how the IRS seems to be sending wayyy more of these deficiency notices lately? feels like they're just throwing them at the wall to see what sticks. my neighbor, my coworker and now ur brother all got them within the last few months. i wonder if they have some kinda quota to meet 🙄