The “Claim Partially Disallowed” IRS Letter 106C is your legal notice the IRS is not fully 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 is notification you have two years to resolve your claim otherwise you will be barred from any refund. The two year period begins with the date of the 106C letter and ends two years later.
You filed a claim for refund and some, not all, of the changes you proposed were allowed by the IRS. Your account will be adjusted for the amount the IRS is allowing which will result in a reduced refund or balance due, or no refund at all.
The IRS reviewed the claim you submitted and allowed some of the refund you requested. The letter should explain why they disallowed part of 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 should send an explanation of why you believe you are entitled to the credit or refund along with documentation proving your position. It is important in your correspondence with the IRS that you indicateif the IRS does not agree you are entitled to the additional refund, that they forward your request to the IRS Independent Office of Appeals (Appeals), which will decide if the claim should be allowed. You can at any time, file suit with the United States District Court that has jurisdiction or with the United States Court of Federal Claims.
Note: These courts are part of the judicial branch of the federal government and have no connection with the IRS.
Important Reminder: As previously mentioned, the issuance of the 106C letter begins the running of a two-year window to resolve your claim. This period continues to run if you decide to ask Appeals to reconsider the decision. Even if Appeals ultimately concludes your claim was correct, you will not receive a refund or credit if Appeals reaches its decision after the period for filing suit has expired. Thus, 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.
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 Paying Your Taxes 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.
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