A more thorough explanation:

A 90-day letter is a type of letter sent by the IRS to individuals who have either failed to submit their tax return or submitted a deficient tax return. It is also known as a CP3219N Notice, Letter 531, or Notice of Deficiency. The letter informs the individual that they have been audited and the IRS has recalculated their tax, penalties, and interest using information from their employers, financial institutions, and other sources of income.

The IRS sends a 30-day letter (Letter 525) with its assessed tax penalty, which allows the individual to accept or appeal the changes made to their return within 30 days. If the individual does not respond within 30 days, the IRS sends a bill for the balance due in the 90-day letter. The 90-day letter explains the IRS's calculation of the individual's tax liability and their options.

For example, if an individual fails to report all of their income on their tax return, the IRS may send a 90-day letter with an assessed tax penalty for the unreported income.

Taxpayers who wish to contest the tax penalty in their 90-day letter may either pay the assessed tax and file a request for a refund or sue in District Court, or they may challenge the assessed tax immediately by filing a petition for review with the United States Tax Court within 90 days from the date of the notice. Failure to exercise either option within the allotted time is counted as a forfeiture of the right to contest the IRS's assessment.

90-day letters serve as the government's final determination of one's tax liability in an effort to assess and collect tax, as allowed under § 6212(a) of the Internal Revenue Code. They are formal legal notices, sent by certified or registered mail.