Why Did I Get a Notice of Assessment?

A Notice of Assessment (NOA) is an official communication from a tax authority, such as the Internal Revenue Service (IRS) or a state tax department. It details the outcome of processing a submitted tax return, confirming your tax liability, any refund due, or the balance you may owe. Receiving an NOA is a routine part of the tax administration process and does not inherently signify a problem or an audit. This document formalizes the tax authority’s review of your submitted information.

Decoding Your Notice of Assessment

Understanding the contents of a Notice of Assessment is important for managing your tax obligations. These notices include key information, allowing taxpayers to reconcile the tax authority’s calculations with their own records. At the top, you will typically find identifying information, such as the tax year, issue date, and your taxpayer identification number (Social Security Number).

The notice often features a “Summary of Account” section, providing an overview of the tax authority’s determination. This summary indicates whether you have a balance due, are receiving a refund, or have a zero balance for the specified tax year. Terms like “tax assessed” refer to the total tax liability determined by the tax authority after reviewing your return. “Credits applied” indicates any tax credits, such as the Earned Income Tax Credit or Child Tax Credit, that reduce your tax burden.

The NOA also details “payments made,” showing the total amount of tax payments or withholdings received. If there are discrepancies or adjustments, the notice typically explains these changes, which might include “penalties” for late filing or underpayment, and “interest” accrued on any outstanding balance. Comparing these figures against your original tax return is a good practice to ensure accuracy and identify any differences in reported income, deductions, or credits.

Situations Leading to a Notice of Assessment

Receiving a Notice of Assessment is common, triggered by various scenarios reflecting the tax authority’s processing of your return. One frequent reason is the standard processing of your tax return after annual filing. The tax authority reviews it and issues an NOA to confirm their calculation of your tax, whether it results in a refund, a balance due, or no change.

Another common reason involves corrections or adjustments made by the tax authority. These can include mathematical errors, inconsistent entries, or omissions of information that prevent proper substantiation. The tax authority also verifies income reported by third parties, such as employers or financial institutions, against the income you reported. If there is a mismatch, the NOA reflects adjustments based on the third-party information.

If you are due a refund, the NOA confirms the amount and signals its release. If the tax authority determines you have an outstanding tax liability, the NOA formally notifies you of the balance due, including any associated penalties and interest. An NOA may also be issued following an audit or examination, reflecting agreed-upon changes or the tax authority’s final determination. If you file an amended tax return (Form 1040-X), a new NOA will be generated to reflect the changes.

Next Steps After Receiving Your Notice

Upon receiving your Notice of Assessment, carefully review its contents and compare them to your original tax return. This helps you understand any differences between your submitted figures and the tax authority’s assessment. Pay close attention to identifying information, such as the notice number and tax year, often found in the upper right-hand corner of the document.

If you agree with the assessment, required actions depend on the outcome. If the NOA confirms a refund, no further action is typically needed, as the refund will be processed. If a balance is due, arrange to pay the amount owed by the specified due date to avoid additional penalties and interest. The IRS offers various payment methods, including online options through IRS Direct Pay, debit or credit card payments, or mailing a check or money order with Form 1040-V.

If you disagree with the assessment, you have the right to dispute the changes. The notice usually provides instructions on how to proceed, and it is important to respond by the stated deadline (often 30 or 60 days). You may need to contact the tax authority, provide supporting documentation, or submit a formal written protest. For instance, if a discrepancy stems from a math error, you generally have 60 days to request an abatement. If the issue is not resolved, you may appeal the decision through the tax authority’s appeals process.