TC 495: Closure of Notice of Deficiency

What the code actually does

IRS Document 6209 (the IRS’s reference guide to its data-processing codes) 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 proposed deficiency (outside jeopardy and termination assessments, IRC §6213(a) bars the IRS from assessing it until the 90-day petition period, 150 days for a notice addressed outside the United States, runs out or a Tax Court decision becomes final). 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 IDRS command 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 covers the notice itself

IRM 8.20.7, Appeals' Examination and Specialized Examination Programs and Referrals (SEPR) Closing Procedures, includes closing instructions for agreed and defaulted Appeals-issued 90-day and 150-day statutory notice cases (IRM 8.20.7.45), not the issuance or rescission of the notice itself.

IRM 4.8.9, Statutory Notices of Deficiency, gives Technical Services the procedures for preparing, reviewing, issuing and rescinding the notice itself; Doc 6209 defines TC 494 and TC 495. That distinction matters procedurally: rescinding a notice under IRM 4.8.9.30 needs the taxpayer's consent, while a closing under IRM 8.20.7 happens in Appeals.

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, Doc 6209 defines TC 495 only as closure of the notice or a notice processed in error, and it does not say which.

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 closed as processed in error and the IRS may issue a NEW Notice of Deficiency, may miss the actual 90-day window under IRC §6213(a) that matters.

What people mistake TC 495 for

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.

What to do next

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 can indicate an error correction followed by a 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.

Run the account history the client supplies through the IRS Transcript Decoder to line up TC 494, TC 495, and any subsequent assessment codes in the order they actually happened.