TC 495: Closure of Notice of Deficiency

What the code actually does

IRS Document 6209 defines TC 495 narrowly: "Closure of TC 494 or correction of TC 494 processed in error... Closure of Notice of Deficiency or Notice of Deficiency processed in error." TC 494 itself is the code that posts when the IRS issues a statutory Notice of Deficiency — the "90-day letter" that gives a taxpayer the right to petition the U.S. Tax Court without first paying the assessed deficiency. TC 495 is not a new event on its own; it is the closing bookend to whatever TC 494 opened.

Both codes carry the same Classification Code, STN 90, tying them together as a matched pair on the account. TC 495 can mean the deficiency case actually concluded — through agreement, a Tax Court decision, default, or an assessment — or it can mean the original Notice of Deficiency was issued by mistake and is being administratively corrected. Nothing in the code itself distinguishes the two.

Which IRM actually governs this code

The classification research behind this page's build initially pointed to IRM 8.20.7, but the full current text of that chapter — Appeals' Examination and Specialized Examination Programs and Referrals (SEPR) Closing Procedures — was searched this session and never mentions TC 494 or TC 495 by number. That chapter governs closing DOCKETED Tax Court cases, a narrower and later stage than the notice's own issuance and closure.

The correct current governing manual is IRM 4.8.9, Statutory Notices of Deficiency, which sits with Technical Services — the function actually responsible for preparing, issuing, and tracking the notice itself, including correcting one issued in error. That distinction matters procedurally: an error correction happens before any petition is ever filed, while a docketed-case closing under IRM 8.20.7 happens only after the taxpayer has already gone to Tax Court.

What this means for the case

If TC 495 appears, first determine whether a Tax Court petition was ever filed on this deficiency. If one was, the case likely resolved through the docketed process — agreement, decision, or default — and the account should reflect whatever assessment or adjustment that resolution produced. If no petition was filed and the TC 494/495 pair posted close together in time, the more likely story is that the original notice was issued in error and administratively withdrawn.

The stakes of getting this distinction right are real: a taxpayer who believes a deficiency case is fully behind them because TC 495 appears, when in fact the notice was simply corrected and a NEW, accurate Notice of Deficiency is forthcoming, may miss the actual 90-day window that matters.

What TC 495 gets confused with

TC 495 is easy to read as proof a deficiency dispute is over, full stop — but Document 6209's own definition covers two structurally different outcomes under one code, and only the account's broader history (a Tax Court docket number, a subsequent new TC 494, an assessment following the closure) tells you which one actually happened here.

It is also not the assessment itself. TC 495 closes the record of the NOTICE; the tax, if any, still has to post separately through the ordinary assessment codes (TC 300, for example, depending on how the case actually concluded). A TC 421 often appears in the same sequence, but it only closes the examination-open marker — it carries no dollar amount of its own and is not evidence that an assessment happened. Treating TC 495 as the final word on the dollar amount owed skips the step where that amount actually gets assessed.

The practitioner's actual next step

Check for a Tax Court docket number or petition-related correspondence before assuming TC 495 means the case simply concluded on its own.

Look for a second TC 494 posting shortly after the TC 495 — that pattern points strongly toward an error correction followed by a corrected, reissued notice, not a closed case.

Confirm whether an assessment actually followed the TC 495 closure, since the notice being closed does not by itself put tax on the books.

Pull the complete account history with the IRS Transcript Decoder to line up TC 494, TC 495, and any subsequent assessment codes in the order they actually happened.