IRS Letters and Notices Abroad: What They Mean and What To Do

First: read it, date it, do not panic

IRS notices are form documents produced mostly by automated systems. Each carries a notice or letter number (top or bottom right — CP followed by digits, or LTR and digits), a tax year, an explanation, and a response date. Those four facts tell you nearly everything: what triggered it, what the IRS wants, and how long you have.

Two habits serve people abroad especially well. First, diarise the deadline immediately — the response date runs from the notice date, and slow international post may already have eaten a chunk of it. Second, keep the envelope and every page; the notice number and dates matter later.

What notices are usually about

Most correspondence falls into a few recognisable families:

• Return adjustments — the IRS has changed, or proposes to change, something on your return, often because a form it received (a W-2, a 1099, a bank's FATCA report) does not match what you filed.
• Balance due reminders — you owe, or the IRS believes you owe, tax, penalties or interest, and the letters escalate politely and then less politely.
• Missing return or information queries — the IRS has no return for a year it expected one, or wants a missing form or schedule.
• Identity and verification requests — confirming it is really you before processing a return or refund.
• Examination letters — a genuine audit of specified items or years. Rarer, and different in kind from everything above.

For expats, mismatch-driven notices are the classic: the IRS computer sees gross income reported by a payer but not the foreign tax credits or exclusions that make the eventual tax nil, and proposes a balance that evaporates once the full picture is explained.

What to do

Work through it in order:

1. Verify it is real. Genuine IRS contact arrives by post. Emails, texts and threatening phone calls demanding immediate payment — especially by gift card or wire — are scams. When in doubt, check the notice against your IRS online account or the IRS's published notice descriptions.
2. Understand the claim. Match the notice to the return year it references and identify exactly what the IRS thinks changed.
3. Respond by the stated method and date. Some notices want nothing (pure information); some want payment; many want a written explanation with documents. Use the address or fax on the notice itself and keep proof of sending — from abroad, tracked post matters.
4. Pay only what is actually right. If the notice is correct, paying promptly stops interest growing. If it is partly or wholly wrong, respond rather than pay-and-hope; refunds of conceded amounts are slower than disputes handled properly the first time.

What not to do

The expensive mistakes are all avoidable. Do not ignore the letter — silence converts proposals into assessed debts and closes appeal routes. Do not miss a statutory deadline while drafting the perfect reply; a short, on-time response beats an eloquent late one. Do not file a duplicate return to "fix" a processing issue unless told to, as duplicates create their own tangles. And do not have a substantive phone conversation with the IRS about facts you are unsure of — anything conceded casually is hard to retrieve.

Deadlines and representation

Every notice states its own response window, and some formal notices allow taxpayers outside the US extra time compared with the domestic deadline — the notice itself is always the authority. Where a notice creates formal rights (to protest, to appeal, to petition), those windows are statutory and unforgiving.

You do not have to handle any of this personally. A Form 2848 power of attorney lets a CPA, enrolled agent or attorney represent you — corresponding with the IRS, receiving notice copies directly so nothing is lost in the post, and dealing with phone queues in US business hours while you sleep. For unresolved problems that the normal process is failing, the Taxpayer Advocate Service exists as an independent route inside the IRS.

Most letters end quietly: an explanation, a corrected figure, a closed file. The ones that end badly are almost always the ones answered late or not at all.