IRS notice & CP letter response — is this a do-it-yourself job?
Some of it, yes — and we will say so on the call if that is the honest answer. The parts that are worth paying for are the ones where a missed election, a missed deadline or an unverified threshold costs more than the fee: the response identifies which notice it is, what the mismatch is, and supplies the missing evidence, with the treaty or credit position explained where relevant.
What if I have already filed and got it wrong?
That is a common starting point. We re-derive the position, identify whether an amendment or a disclosure route is the right vehicle, and tell you which one preserves the relief that is still available. The order matters more than the speed.
How long will it take?
It depends on the documents rather than on us. Once the pack is complete most filings turn around inside a fortnight; anything that needs a certificate from a tax authority runs on that authority's timetable, which we tell you at the start rather than at the end.
What does a CP letter from the IRS actually mean?
Most of them are computational or matching notices. The system has either recalculated something on your return or compared it against information reported by somebody else — a payer, a bank, an employer — and found a difference. That is a mechanical process, not an accusation, and most notices of this kind are answered with a document rather than an argument. What matters more than the tone of the letter is which notice it is, because each one carries its own response deadline, and the deadline is what determines the rights available to you afterwards.
Is an IRS notice the same thing as being audited?
Usually not. A matching or computational notice is generated because two records do not agree; an examination is a decision to look at a return. The practical difference is in the response. A notice generally has one specific question behind it, and supplying the missing evidence answers it, often with no further correspondence. Treating a notice as though it were an examination tends to produce a long letter that does not address the mismatch, while the deadline runs. Identifying precisely which notice arrived is the first and most useful step.
What happens if I ignore the deadline on an IRS notice?
The proposed becomes the assessed. That is the mechanism worth understanding: while the response window is open, what the notice describes is a proposal you can answer with evidence; once it closes, the adjustment is generally made and the routes available to you change, usually to slower and more formal ones. Nothing about the underlying facts has altered, but the position you argue from has. This is why the date on a notice matters more than its contents to a filer abroad, where the letter may have taken weeks to arrive.
The IRS says my income does not match, what do I do now?
Find out what the other record says before you decide the return is wrong. A mismatch has three common causes: the payer reported an amount you did not receive in that form, the same income was reported in a place the matching process did not look for it, or a period or conversion basis differed. All three look identical on the notice. The response identifies the notice, states what the mismatch actually is, and supplies the evidence that resolves it. Where the return was right, that is a reconciliation rather than an amendment.
How do I answer a notice about foreign income while living abroad?
The substance is the same as anywhere, but the timetable is not. Post takes longer to reach you, and the evidence a notice about foreign income needs — a foreign authority's record of tax assessed, a bank confirmation, a translated statement — comes from institutions working to their own schedules. So the order of work changes: identify the notice and its deadline first, request the documents immediately, and prepare the response around what will realistically arrive in time. Where the treaty or credit position explains the difference, that explanation goes in with the documents.
Do I need to write an argument or just send the document?
In most cases, the document, with just enough writing to make it usable. A good response says which notice it answers, states in one or two sentences what the mismatch is, and attaches the evidence that resolves it, with the treaty or credit position explained where that is what is doing the work. Long argument on a matching notice tends to obscure the one piece of paper that settles it. The exception is where the notice reflects a position you genuinely disagree with rather than a record that is out of step.
I have not filed for several years while living abroad — what are my options?
Both countries have routes back, and using one before they contact you is what preserves the relief. On the US side there are procedures aimed at taxpayers whose failure was not wilful, including one designed for people living outside the country, and separate procedures for late account reports and information returns alone. Canada has its voluntary disclosures programme and taxpayer relief for penalties and interest. Filing quietly and hoping is the one approach with no protection attached to it. See catch-up filing.
Do Canada and the United States share tax information?
Yes, through more than one channel. The treaty has an exchange-of-information article that supports both routine and on-request exchange. Separately, an intergovernmental agreement has Canadian financial institutions identify US-reportable accounts and report them to the CRA, which passes them to the IRS, with the reverse flow for Canadian residents. Most other country pairs use the Common Reporting Standard for the same purpose. See FATCA reporting.
