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Simple English definitions for legal terms
letter of comment
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A quick definition of letter of comment:
A letter of comment is a type of letter that is sent by the IRS or SEC to a taxpayer or registrant of a securities offering, respectively. The letter details the ways in which a tax return or registration statement seems to be deficient or not in compliance with federal disclosure requirements. It is also known as a deficiency letter or letter of comments.
A more thorough explanation:
A letter of comment is a type of letter that is sent to a person or organization to point out deficiencies or issues with a particular matter. It is also known as a deficiency letter.
For example, the Internal Revenue Service (IRS) may send a deficiency letter to a taxpayer if their tax return seems to be incomplete or incorrect. The letter will detail the areas where the return is deficient and may request additional information or clarification.
Similarly, the Securities and Exchange Commission (SEC) may send a letter of comment to a registrant of a securities offering if their registration statement does not conform to federal disclosure requirements. The letter will outline the areas where the statement is deficient and may request revisions or additional information.
Overall, a letter of comment is a way for a regulatory agency to communicate with individuals or organizations about issues that need to be addressed. It is important to respond promptly and thoroughly to these letters to avoid further complications or penalties.