IRS Form 870: Waiver of Restrictions, Interest Suspension, and Appeal Rights

IRS Form 870, titled Waiver of Restrictions on Assessment and Collection of Deficiency in Tax, is the document you sign at the end of an audit to let the IRS record and bill an agreed deficiency without first sending a formal notice of deficiency. Signing speeds up the process and can freeze interest, but it also closes the door to U.S. Tax Court. You can still pay and sue for a refund in another court, so the waiver is not a permanent settlement. Whether to sign turns on how confident you are in the examiner’s numbers and how much you value keeping every dispute route open.

What Signing Actually Waives

Normally, the IRS cannot assess additional tax against you until it mails a statutory notice of deficiency and gives you 90 days to petition the U.S. Tax Court, or 150 days if you’re outside the country.¹ Section 6213(d) of the Internal Revenue Code lets any taxpayer file a written waiver removing those restrictions, and Form 870 is the standard document for it.²

Once the IRS receives your signed form, it can post the new liability and start collection without issuing that 90-day letter. You will not get a separate chance to take the dispute to Tax Court. That door closes the moment you sign.³

What signing does not do is give the IRS extra time to assess. The form’s instructions are explicit: it will not prevent the IRS from later determining you owe more, but it also won’t extend the standard assessment period.⁴

What You Still Have After Signing

Form 870 is not a full settlement. The form itself states that your consent will not prevent you from filing a refund claim after you’ve paid the tax.⁴ If the IRS denies that claim, you can sue for a refund in either a U.S. District Court or the U.S. Court of Federal Claims. The one court permanently off the table is Tax Court.

The practical cost is cash flow. Tax Court lets you challenge a deficiency before paying it. The refund route requires you to pay first, then argue for your money back. On a large deficiency, that’s a real commitment. But the option exists, which keeps Form 870 from being an irrevocable surrender.

Deadlines govern refund claims. You generally must file within three years from when you filed the return or two years from when you paid the tax, whichever period ends later.⁵ Miss that window and the right is gone regardless of the merits.

The Interest Suspension That Comes With Signing

The biggest financial reason to sign sits in Section 6601(c). If the IRS does not send you a Notice and Demand for Payment within 30 days after it receives your signed waiver, interest on the deficiency stops accruing.⁶ The suspension starts on the 31st day after filing and lasts until the IRS mails the bill. Once the notice goes out, interest resumes on any unpaid balance.

The IRS underpayment interest rate changes quarterly. For the first half of 2026, the rate for individual taxpayers is 7% for the first quarter and 6% for the second, compounded daily.⁷ On a $50,000 deficiency at 7%, each suspended month saves roughly $290. Three months of delay past the 30-day window is close to $600 you don’t owe.

Keep a dated record of when you submitted the signed form. When the bill arrives, check that the interest calculation reflects any suspension period. If the IRS charged interest during a period when it should have been paused, you can file a claim for credit or refund within the same general deadline: three years from filing or two years from payment, whichever is later.⁸

What Happens If You Don’t Sign

You are never required to sign. Refusing triggers a different sequence, not the end of the matter.

30-day letter. After the audit, the IRS issues a letter (Letter 525 for correspondence audits, Letter 915 for in-person audits) along with Form 4549 showing the proposed changes. You have 30 days to respond with documentation or an explanation of your disagreement.⁹
Informal conference. Before the 30-day deadline, you can request a meeting with the examiner’s supervisor.
Appeals conference. If the disagreement continues, you can request a conference with the IRS Independent Office of Appeals. For cases where the proposed additional tax and penalties total $25,000 or less per tax period, you can use the streamlined Small Case Request process (Form 12203) instead of a formal written protest.¹⁰
Notice of deficiency. If you don’t respond, or if Appeals can’t resolve the dispute, the IRS issues a statutory notice of deficiency. You then have 90 days to petition Tax Court before assessment.¹

The appeals route preserves your Tax Court rights and gives you a shot at negotiating a lower amount with an independent office inside the IRS. Signing Form 870 skips all of that. The tradeoff makes sense when you genuinely agree with the adjustments, or when the disputed amount is small enough that fighting it costs more than paying it. When the numbers are large or the legal questions are seriously contested, keeping appeals rights is usually worth the extra time.

Agreeing to Some Adjustments and Not Others

You don’t have to accept every item on the examiner’s report to use Form 870. The IRS allows partial agreements: you sign for the items you concede, and the unagreed items follow the normal dispute path. The examiner prepares two reports for this. One reflects only the agreed adjustments and the corresponding deficiency. The other shows all proposed adjustments but only the remaining unagreed amount, with the agreed items marked as already assessed.¹¹

This is a useful move when an audit covers multiple issues and some are clearly correct while others are worth fighting. Signing on the undisputed portion stops interest from piling up on that amount. The contested items proceed through Appeals or Tax Court on their own track.

Form 870 Is Not Form 870-AD

The two forms are easily confused and do different things. Form 870-AD is used for negotiated, mutual-concession settlements, particularly those resolved through the IRS Independent Office of Appeals. It contains a commitment from both sides not to reopen the case, and it becomes binding once the IRS Commissioner or delegate accepts it.¹²

Form 870 carries no such pledge. The IRS can still reopen your case within the normal assessment period, and you can still file a refund claim. If you’re negotiating a major concession with Appeals, expect Form 870-AD. If an examiner proposed adjustments and you’re agreeing, it will almost certainly be Form 870.¹²

Who Signs and How

The examining officer usually hands you Form 870 at the end of the audit, pre-filled with the figures from Form 4549 (the examination changes report). Check every number against that report before signing. Errors in transferring figures cause incorrect billing, and fixing them after assessment adds delay.

If the audit involves a jointly filed return, both spouses must sign. The IRS rejects the form if only one spouse signs, because both parties are liable for the debt.⁴ The Internal Revenue Manual notes one exception: the signature requirement is relaxed when the deficiency has already been paid in full.¹²

A tax professional holding a valid Form 2848 (Power of Attorney) can sign on your behalf. That authority comes with the power of attorney as long as the relevant tax matter is listed on the form, with no special checkbox needed.¹³ The IRS also accepts faxed and electronically transmitted signatures, including scanned images of handwritten signatures sent by fax or email. To qualify, an electronic signature must identify the signer, indicate approval of the form’s contents, and display as either a scanned image or a signature-pad capture.¹²

After You Sign

Return the signed form to the revenue agent or IRS office handling your examination, not to a general processing center. The agent updates the case file and routes the assessment through the IRS’s systems. Recording the debt generally takes a few weeks.

Once the assessment posts, the IRS issues a Notice and Demand for Payment. That is your official bill, and it also starts the clock for the 30-day interest-suspension rule discussed above. If you cannot pay in full at once, you can request an installment agreement. Interest continues to accrue on any unpaid balance until it’s paid off.

1
Internal Revenue Service. Understanding Your CP3219N Notice
2
Office of the Law Revision Counsel. 26 USC 6213 – Restrictions Applicable to Deficiencies; Petition to Tax Court
3
Internal Revenue Service. Chief Counsel Advice PMTA 00096
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Internal Revenue Service. Form 870 – Waiver of Restrictions on Assessment and Collection of Deficiency in Tax
5
Office of the Law Revision Counsel. 26 USC 6511 – Limitations on Credit or Refund
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Office of the Law Revision Counsel. 26 USC 6601 – Interest on Underpayment, Nonpayment, or Extensions of Time for Payment of Tax
7
Internal Revenue Service. Quarterly Interest Rates
8
Internal Revenue Service. Internal Revenue Manual 20.2.5 – Interest on Underpayments
9
Taxpayer Advocate Service. Audit Report Letter Giving Taxpayer 30 Days to Respond
10
Internal Revenue Service. Preparing a Request for Appeals
11
Internal Revenue Service. Internal Revenue Manual 4.10.8 – Report Writing
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Internal Revenue Service. Internal Revenue Manual 8.6.4 – Reaching Settlement and Securing an Appeals Agreement Form
13
Internal Revenue Service. Instructions for Form 2848 – Power of Attorney and Declaration of Representative