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Simple English definitions for legal terms
deficiency letter
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A quick definition of deficiency letter:
A deficiency letter is a letter sent by the IRS or SEC to a taxpayer or registrant, respectively, that outlines the ways in which a tax return or registration statement appears to be incomplete or not in compliance with federal requirements. It is also known as a letter of comment or letter of comments.
A more thorough explanation:
A deficiency letter is a communication from a government agency, such as the Internal Revenue Service (IRS) or the Securities and Exchange Commission (SEC), to a taxpayer or registrant, respectively, indicating that there are issues with their tax return or registration statement.
For example, an IRS deficiency letter may inform a taxpayer that their tax return is incomplete or contains errors that need to be corrected. Similarly, an SEC deficiency letter may highlight areas where a registration statement does not meet federal disclosure requirements.
These letters are also known as letters of comment or letters of comments.
Overall, a deficiency letter serves as a notice to the recipient that they need to take action to address the issues identified by the government agency.