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Deficiency means:
the excess of a taxpayer's correct tax liability for the taxable year over the amount of taxes previously paid for that year. It is a concept used in the United States. The U.S. Internal Revenue Service is authorized to assess deficiencies during an audit of the taxpayer's tax return, and a deficiency may be used as the basis for penalties for the underpayment of tax, on such grounds as negligence or fraud in filing the return. Former IRC (check if this IRC provision is current here) §6211.

Description and Definition of Deficiency

The difference between the tax assessed by the IRS and the amount reported on your return. The IRS has the power to assess deficiencies during an audit of your return and it may use a deficiency as a basis for tax underpayment penalties.


See Also

Further Reading

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