The “Claim Disallowance” IRS Letter 105C or Letter 106C is your legal notice that the IRS is not allowing the credit or refund you claimed.
The letter states the reason for the IRS’s decision, the date of the decision, and the tax year or period for which the claim is denied. In addition, the letter provides a timeframe in which you must file suit if you wish to challenge the denial in court.
The credits or deductions that were claimed on your return were disallowed. Your account will be adjusted, possibly resulting in a reduced refund or balance due, or no refund at all.
While the reason your claim was disallowed are specific to your claim one of the more common reasons is the IRS determined the claim was not timely filed. In general, to be timely, a claim for credit or refund must be filed within the later of three years from when you filed your return, or two years from the date you paid the tax whichever is later. For more information about when to file a claim for credit or refund and limits on the amount of credit or refund, see Publication 556, Examination of Returns, Appeal Rights, and Claims for Refund.The letter should include the reason why the IRS is denying the claim.
If you agree with the IRS for the reasons stated in the letter, you don’t need to do anything further. If you do not agree, and still believe you are entitled to the credit or refund you can:
Note: These courts are part of the judicial branch of the federal government and have no connection with the IRS.
When the claim disallowance letters are issued they begin a two year window for you to resolve your claim with the IRS. The timeframe begins two years from the date of these letters. If you decide to ask Appeals or the IRS to reconsider their decision, the two year period does not stop. While you can continue to try to resolve the claim with the IRS, as you approach the end of the two-year period specified in the letter, you may want to file a timely suit to protect yourself. Even if Appeals or the IRS ultimately decides your claim was correct, you may not receive a refund or credit after the period for filing a suit has ended.
If you’re entitled to a refund, the IRS will send it about six to eight weeks from the time the IRS receives your response and adjusts your account. If the adjustment to your account results in a balance due, the IRS will send you a balance due notice and you should pay the amount you owe by the due date on the notice. If you can’t pay the full amount due, pay as much as you can to limit penalties and interest and visit Make a Payment to consider online payment options. If you need additional assistance, call the IRS at the toll-free number on the top right corner of your notice.
Understanding your notice or letter
For more specifics on your notice, visit Understanding your IRS Notice or Letter on IRS.gov
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The Taxpayer Advocate Service is an independent organization within the IRS. TAS helps taxpayers resolve problems with the IRS, makes administrative and legislative recommendations to prevent or correct the problems, and protects taxpayer rights. TAS helps all taxpayers (and their representatives), including individuals, businesses, and exempt organizations. You may be eligible for free TAS help if your IRS problem is causing financial difficulty, if you’ve tried and been unable to resolve your issue with the IRS, or if you believe an IRS system, process, or procedure just isn’t working as it should.
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Low Income Taxpayer Clinics (LITCs) assist individuals whose income is below a certain level who need to resolve tax problems with the IRS. They also provide education, outreach, and information on taxpayer rights to individuals who speak English as a second language. LITCs represent taxpayers in disputes before the IRS and courts and help taxpayers respond to IRS notices and correct account problems. Services are offered for free or a small fee. LITCs are independent from the IRS and TAS. For more information or to find an LITC near you, see the LITC Page or Publication 4134, Low Income Taxpayer Clinic List. You can also request Pub. 4134 by calling 800-TAX-FORM (800-829-3676).
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