Beyoncé Has A Tax Problem: A Case Study On The Notice Of Deficiency

On April 17, 2023, an attorney for Grammy-award winner, Beyoncé Knowles-Carter, filed a Tax Court Petition on the singer's behalf disputing $2.7 Million in increased taxes and penalties.¹ While the news captured media attention due to the mega superstar's name, this current showdown with the IRS serves as a real-life case study on the Notice of Deficiency. A high-level look at Beyoncé's Tax Court Petition filing will help clarify:

• The Notice of Deficiency
• Tax Court Petition Procedures
• Disputing Proposed Tax and Penalties

The Notice of Deficiency

IRC Code Section 6212(a) mandates the IRS issue taxpayers a Notice of Deficiency as a precursor to formally assessing an underpayment of taxes and penalties. Once notice is given, the IRS must wait 90 days after the Notice of Deficiency is mailed to the taxpayer before the IRS can move the assessment from a proposed tax liability to an actual tax liability. This time period is expanded to 150 days for