Possibly. The IRS says the streamlined filing compliance procedures (opens the official IRS page in a new tab) are closed to anyone whose returns are under civil examination for any tax year, whatever the examination is about, and to anyone under investigation by IRS Criminal Investigation. A letter from the IRS is not automatically either of those. What decides the question is what the letter actually is, and that needs to be read before anything else is filed.
This post is for US citizens and green card holders in the UK who are behind on US returns or FBARs and have just received an IRS letter or a bank request. Our guide for people behind on US taxes in the UK sets out every catch-up route. Here we look at the examination bar, the common notices and what the IRS says about each, how a bank letter differs, what to do when a letter arrives, and why timing matters.
Which IRS contact closes the streamlined procedures
Two kinds. The IRS states that a taxpayer whose returns are under civil examination for any taxable year cannot use the streamlined procedures, even if the examination has nothing to do with foreign accounts. A taxpayer under criminal investigation by IRS Criminal Investigation is also ineligible. Both bars apply to the Foreign and Domestic routes alike.
The bar is wide in one direction and narrow in another. It is wide because it covers any year and any subject: an examination of a single old return, about a single deduction, is enough. It is narrow because the IRS ties it to an examination or an investigation, not to every contact. The Foreign route (opens the official IRS page in a new tab) and the Domestic route (opens the official IRS page in a new tab) share it, along with the core package of three years of returns and six years of FBARs.
The IRS adds that a taxpayer already under examination may consult the examining agent. That sentence matters: it signals that someone in that position deals with the open examination rather than filing a streamlined package around it. Our IRS representation service handles the conversation with the examiner where that is the situation, including the years that were never filed.
- A civil examination of any return, for any year, on any issue
- A criminal investigation by IRS Criminal Investigation
- Both bars apply to both streamlined routes
Is every letter from the IRS an examination
No. The IRS sends notices for many reasons, including a balance due, a change to a refund, a question about a return or a correction it has made. Its pages for the common notices describe each one without calling it an examination. Where the IRS does not say, whether a particular letter affects streamlined eligibility depends on the facts.
The IRS page on understanding your IRS notice or letter (opens the official IRS page in a new tab) lists the routine reasons for writing and says the notice or letter number appears in the right-hand corner. Each number has its own explanation page. Those pages are the best evidence of what the IRS thinks the letter is, and they rarely use the words examination or audit. Reading the right page first saves guessing.
The IRS also says, on its page about audits, that it notifies a taxpayer of an audit by mail and does not start one by telephone. An audit is carried out either by correspondence or at an interview. A telephone call claiming to open an audit is therefore a reason for caution and a check of your IRS online account, not a reason to file anything.
- CP11: the IRS says it corrected one or more mistakes on the return and the amount owed changed
- CP14: the IRS says money is owed on unpaid taxes and asks for payment by the date shown
- CP2000: the IRS says third-party information does not match the return and proposes changes; the notice is not a bill
- CP59: the IRS says it has no record of a prior-year return and asks the person to file or explain
Does a CP2000 or correction notice count as an examination
In a grey area. A CP2000 proposes changes after matching a return against information from employers, banks and brokers, and a CP11 reports a correction already made. The IRS does not describe either as an examination on its notice pages, but either can lead further if the response does not resolve the point.
The IRS page on the CP11 says that if a person disagrees and does not send supporting information, the case may be forwarded for audit, with audit staff then making contact. That suggests the correction notice and an audit are different steps. It also shows how one can become the other. The CP2000 page says that if the IRS receives no reply, or cannot resolve the discrepancy, it may send another notice and a bill.
A CP2000 is more likely for someone who has been filing Form 1040 but left something out, such as income reported to the IRS on a US information return. Because it concerns a filed return, it sits alongside any decision about amending that year. Our tax controversy service handles replies where the proposed change is disputed, and the reply and any catch-up filing are planned together.
Is a letter from a UK bank the same as IRS contact
No. A FATCA self-certification request comes from the UK institution, under UK rules, and asks whether you are a US person. It is not a notice from the IRS, an examination or an investigation, and on its own it does not close a streamlined route. It does mean your account details may reach the IRS.
Under FATCA (opens the official IRS page in a new tab), UK banks and platforms report accounts held by US persons to HMRC, which passes the data to the IRS. The bank has no view on whether you have filed. Our post on a FATCA letter from your UK bank covers how to answer the form truthfully and what the bank then reports to HMRC each year.
The bank letter matters in a different way. For many people it is the first written sign that the United States may regard them as a taxpayer. That date becomes part of the story told in the non-wilful certification. Acting within a reasonable time afterwards supports an account of the earlier years as a mistake. Waiting years after being told is harder to describe that way.
What to do when an IRS letter arrives
Read it, identify it, and respond by the date it gives. The IRS asks recipients to act by the due date when it requests a reply, and to reply by that date to protect appeal rights. Ignoring a letter tends to produce further notices, and it can turn a routine matter into a harder one.
Start with the notice number and look it up on irs.gov. If it does not appear, or the letter looks suspicious, the IRS says to call the general helpline published on that page. Keep the envelope, which shows the date of posting, and note the day it reached your UK address, since post from the United States can be slow.
Then decide the sequence before acting. A reply, a payment or a missing return sent in haste can sit awkwardly beside a streamlined submission made a month later. Our IRS streamlined filing service works out whether the route is still open and, if it is, how the reply and the submission fit. A Form 2848 (opens the official IRS page in a new tab) lets a representative deal with the IRS directly.
A worked example: a US citizen working as a nurse in Leeds filed US returns for a time, then stopped. A CP59 arrives about a recent year. The IRS page on that notice does not call it an examination, but it does ask her to file or explain. Her reply, the missing return and any wider catch-up, including old FBARs, need planning together, and whether streamlined remains available is a question for review.
- Find the notice or letter number and read the IRS explanation page for it
- Note the response date and work back from it
- Do not send returns or payments until the route has been chosen
- Keep a copy of the letter, the envelope and every reply
- Ask for a review before replying if any US return or FBAR is outstanding
Why acting before IRS contact matters
Because several IRS procedures are open only to people the IRS has not yet contacted. The streamlined procedures close on examination. Other routes close earlier, on contact about the specific missing forms. Once that happens, the published terms give way to the normal penalty process, run on the IRS's timetable.
The delinquent international information return submission procedures (opens the official IRS page in a new tab) require that the taxpayer is not under civil examination or criminal investigation and has not already been contacted by the IRS about the missing returns. The IRS page on the FBAR (opens the official IRS page in a new tab) advises anyone who has not been contacted about a late FBAR, and is not under investigation, to file as soon as possible to keep potential penalties to a minimum.
For conduct that may have been wilful, the IRS Criminal Investigation voluntary disclosure practice (opens the official IRS page in a new tab) treats a disclosure as timely only if it reaches the IRS before an examination or investigation has begun and before the IRS has received information about the person from a third party. None of this means a letter is on its way. It means the options narrow, and do not widen, with time.
- Streamlined: closed by a civil examination for any year or a criminal investigation
- Delinquent information returns: closed also by IRS contact about those forms
- Late FBARs: the IRS advises prompt filing before any contact
What if the IRS has already opened an examination
Then the streamlined procedures are no longer available, and the outstanding years are dealt with through the examination and the IRS's ordinary processes. That is not the end of the matter. It changes the setting, and it makes representation and a clear account of the facts more important, not less.
Penalty relief is still possible in the ordinary way, for example where reasonable cause can be shown, but nothing about it is automatic. Returns that were never filed, or need correcting on Form 1040-X, still have to be prepared accurately. The approach depends on what the examination covers and on whether there is any question of wilful conduct.
If you are unsure what a letter means, you can contact US UK Tax Returns and send us a copy. We will tell you what we think it is and whether we think a streamlined route is still open, and we will say so if we think it is not. The wider choice of routes is in our guide to IRS streamlined filing from the UK, and our post on the Form 14653 certification covers how the narrative is written.
General information, not advice. The right answer depends on your circumstances and the tax year concerned.
