What This Letter Means

Letter 4550C comes from the IRS Business Underreporter (BUR) program. BUR checks whether income and deductions were properly reported on Form 1120 corporate returns and Form 1041 estate and trust returns. A BUR case usually starts with Letter 2531 or Letter 2030, which propose changes. Letter 4550C is the follow-up letter the tax examiner uses during the case to ask for more information or to tell you something.

Why You Got It

The IRS uses Letter 4550C for several different messages. Common ones:

  • Your response to Letter 2531 or Letter 2030 was incomplete, and the examiner needs more information.
  • You paid the proposed tax but didn't sign the consent, so the IRS is acknowledging the payment and asking for the missing signature.
  • Your request to waive a penalty was denied, and the letter explains why.
  • The payer of the income confirmed the income belongs to you. A copy of the payer's response is included.
  • Your case can't go to Appeals because too little time is left on the assessment statute.
  • You asked for something after the statutory notice of deficiency was issued, and the IRS can't honor it.

What to Do

Read the whole letter and find the paragraph that applies to you. If it asks for documents, send them by the date shown, with a copy of the letter on top. If it asks for a signature under the Consent to Tax Increase statement, understand that signing agrees to the additional tax. Don't sign if you still dispute the change.

Keep copies of everything you send. Fax or certified mail gives you proof of the date.

If You Already Have a Notice of Deficiency

This is the part that matters most. If the IRS already sent Letter 3219-B, the statutory notice of deficiency, a Letter 4550C does not extend your deadline to petition the U.S. Tax Court. That period is usually 90 days from the date on the notice. If the deadline is close, file the petition. Don't wait on correspondence to save it.

If You Disagree

Explain in writing exactly which items you dispute and attach the support. If your business has a representative, have them file Form 2848 so they can deal with the examiner directly.

If you received Letter 4550C and want help with the underreporter case, call us at (813) 229-7100.