Deficiency [Tax] Law and Legal Definition

A deficiency is the amount by which the tax imposed exceeds the amount shown as the tax by the taxpayer upon his return. Whenever a taxpayer fails to make adequate return of income, there is a deficiency. [Moore v. Cleveland R. Co., 108 F.2d 656 (6th Cir. Ohio 1940)].

Deficiency as relating to the assessment of an estate tax is the amount by which the tax imposed exceeds the amount shown as the tax by the executor upon his return. [United States v. Kelley, 24 F.2d 234, 236 (S.D. Cal. 1927)].

“Section 292 of the Revenue Act of 1928, 26 U.S.C.S. § 292, provides that interest upon a deficiency shall be assessed at the same time as the deficiency, and collected as part of the tax to the thirtieth day after the filing of such waiver or to the date the deficiency is assessed whichever is the earlier.” [Moore v. Cleveland R. Co., 108 F.2d 656 (6th Cir. Ohio 1940)].