Introduction: What a CP22A Notice Means for Americans in Britain
A CP22A notice is the IRS letter confirming that it has processed a change you asked for, usually on Form 1040-X, and that the change leaves a balance to pay. For an American living in London, Edinburgh or the Home Counties, it often lands months after the amended return went in, with interest added that nobody mentioned at the time. Consequently, a letter that should be routine can feel like an ambush.
This guide is written for high-earning Americans in Britain, including bankers, fund managers, founders and dual nationals, who amended a return to correct missed reporting and now face the bill. In particular, we explain how the CP22A notice figures are built, why interest runs from a date long before you filed the correction, how to pay from a UK bank, and when the bill itself is wrong. Throughout, we draw on the amended-return files that TaxYork prepares for clients every year.
Why a CP22A Notice Follows Your Own Amended Return
The IRS describes the letter as "Changes to your Form 1040 as requested by the taxpayer resulting in balance due". In other words, the CP22A notice is not an audit and not a mismatch letter. Instead, it is the IRS confirming that it accepted your own correction and assessed the extra tax you reported. The official IRS guide to understanding your CP22A notice makes the same point and directs you to pay by the date printed on the letter.
That distinction matters. A CP2000 proposes a change and invites you to agree or disagree. By contrast, the CP22A notice reflects an assessment that has already posted to your account, because you supplied the figures yourself. Therefore, your response is mainly about paying correctly and checking that the IRS processed the 1040-X as you filed it.
How the CP22A Notice Differs From Other Balance-Due Letters
Americans abroad often receive several IRS letters in one year, so it helps to place this one. A CP14 is the first bill on an original return, which we cover in our guide to the IRS CP14 balance due notice. A CP22A, however, relates to an adjustment you initiated. Meanwhile, a CP21A or CP21B tells you an amendment produced a refund instead. If you amended several years at once, you can easily receive a mix of all three in the same month.
Why UK-Based Americans Amend and Then Owe
Most of the amended returns we prepare for Americans in Britain arise from missed reporting rather than missed income. Specifically, the original return usually reported salary and bonuses correctly but mishandled something British: a UK fund, a pension payment, a share scheme or foreign currency. When the 1040-X fixes that error, extra US tax often follows, and the CP22A notice is how the IRS collects it.
UK Funds Reported as Ordinary Capital Gains
The single most common trigger in our practice is a UK unit trust, OEIC or ETF held in a general investment account. These funds are usually passive foreign investment companies for US purposes. Furthermore, a sale that the original preparer reported as a simple long-term gain may need reworking under the excess distribution rules on Form 8621. That rework can add ordinary-rate tax plus a separate interest charge, so the amended return shows a balance due even before the IRS adds its own interest.
Foreign Tax Credit and Exclusion Errors
The second trigger is a broken foreign tax credit computation. For example, a return may have claimed UK tax as a credit in the wrong category, or claimed the foreign earned income exclusion and a credit on the same pay. Correcting that error sometimes cuts the credit, and therefore raises US tax. Equally, revoking an exclusion election to switch to credits can raise tax in an early year while saving more later. Our tax treaty optimisation service exists largely to get these calculations right first time.
Share Schemes, Currency and Missed Accounts
Additionally, we see amendments driven by RSU vests taxed on the wrong date, foreign currency gains on mortgage redemptions, and interest from UK accounts that never reached the original return. An account that was missing from the return was often missing from the FBAR as well. In that case, the amended return is only half the fix, and the FinCEN guidance on filing the FBAR applies alongside it. Our FBAR and FATCA reporting service handles both pieces together.
The Clock: Interest, the 21-Day Window and Late-Payment Penalties
The figure that surprises clients most on a CP22A notice is interest. The extra tax shown on a 1040-X was legally due on the original April deadline. Therefore, IRS interest runs from that date, not from the date you filed the amendment or the date the letter was printed.
Why Interest Starts in April of the Original Year
Americans in Britain receive an automatic extension to 15 June to file, yet interest still runs from 15 April. This rule surprises many people, but the IRS states it plainly in its page on where and when US citizens abroad file and pay. As a result, an amendment to a 2023 return carries interest from 15 April 2024. The rate is reset every quarter, and the IRS confirmed that the underpayment rate stays at 7% for the fourth quarter of 2026. Earlier quarters are listed on the IRS page of quarterly interest rates, and interest compounds daily.
The Interest-Free Window After the Notice Date
Under the notice-and-demand rules, interest on the amount shown stops if you pay within 21 calendar days of the notice date. For balances of $100,000 or more, the window shrinks to 10 business days. Importantly, the window counts from the date printed on the letter, not from the day Royal Mail delivers it. Post from the IRS can take weeks to reach a UK address, so a CP22A notice may arrive with only days of the window left.
When a Late-Payment Penalty Can Apply
If the balance is still unpaid after that window, the IRS can add a failure-to-pay penalty of 0.5% for each month or part month, capped at 25%. Notice 746, Information About Your Notice, Penalty and Interest, sets out how these additions work. However, the penalty is often avoidable. If you pay in full within the window, no late-payment addition should arise on the notice amount. Moreover, where one has already been charged, a clean compliance history may qualify you for first-time abatement under the IRS penalty relief rules.
Why the Accuracy Penalty Should Be Absent
Notably, a correctly timed amendment can shield you from the 20% accuracy-related penalty altogether. A qualified amended return, filed before the IRS contacts you about the year, is treated as part of the original filing for penalty purposes. Our guide to the qualified amended return explains the timing. Consequently, if your CP22A notice shows an accuracy penalty, you should question it before paying.
Checking the CP22A Notice Figures Before You Pay
Paying first and checking later is a costly habit. In our experience, IRS processing errors on amended returns do happen, usually a transposed figure or a schedule that was never keyed. Therefore, we follow the same review sequence on every CP22A notice that reaches our clients.
Our Five-Point Review Sequence
First, match the tax year and Social Security number on the letter against the 1040-X you filed. Second, compare the tax increase on the notice with the net change in total tax on your amended return, because these should agree to the dollar. Third, check the payments and credits section, since a payment wired with the 1040-X sometimes posts to the wrong year. Fourth, recompute interest roughly from 15 April of the following year, using the published quarterly rates, to confirm the date range is right. Finally, pull an IRS account transcript and look for a transaction code 290 matching the tax change. If all five checks agree, the bill is genuine and the only question is how to pay.
When the IRS Processed Something You Did Not Ask For
Sometimes the IRS changes a figure on its own while processing the amendment, for example by disallowing a foreign tax credit it could not match to a Form 1116. In that case, the letter should explain the change. If it does not, call the number on the notice. From the UK, the IRS international line is +1 267 941 1000, which is not toll-free. If you hold a third-party authorisation, your preparer can make that call using the IRS power of attorney and authorisation process.
A CP22A Notice You Never Requested
If you did not file a 1040-X, the letter itself is the problem. A CP22A notice for an amendment you never made can signal identity theft, since fraudsters sometimes file amended returns under real Social Security numbers. In that situation, follow the steps at IRS Identity Theft Central and do not pay until the account is investigated.
Paying a CP22A Notice From a UK Bank
Paying the IRS from Britain is harder than it should be. IRS Direct Pay needs a US bank routing number, so a UK current account alone will not work. As a result, Americans in Britain generally use one of three routes.
Using a US Account or a Card
If you still hold a US checking account, Direct Pay or the IRS online account is the quickest way to clear a CP22A notice, and the payment posts within days. Alternatively, you can pay by debit or credit card through an IRS-approved processor, which charges a percentage fee. For a six-figure balance, that fee can exceed the cost of a wire. Card payments also leave you exposed to your card issuer's exchange rate.
A Same-Day Wire From a UK Account
The IRS accepts international wires in US dollars. You complete the Same-Day Taxpayer Payment Worksheet with the correct tax type code and tax period, then instruct your bank. The IRS page on foreign electronic payments lists the routing details and codes. In practice, we tell clients to quote their Social Security number, the form number 1040 and the exact tax year in the payment reference. Otherwise, a wire can sit unapplied while interest keeps running.
Timing the Currency Conversion
For a larger bill, the sterling cost matters as much as the dollar figure. Converting through a specialist currency account rather than a high-street bank often saves 1% to 2%. However, do not let the search for a better rate push you past the 21-day window. On a $150,000 balance at 7%, each extra week of interest costs roughly $200, which is less than most rate differences but still a real cost.
When You Disagree or Cannot Pay in Full
Not every client can pay a large bill within three weeks, particularly when it follows a liquidity event that has already been reinvested. Equally, some clients believe the amended return itself was wrong. Both situations have orderly routes.
Correcting the Correction
If you discover that the 1040-X overstated your tax, the fix is another amended return for the same year. The IRS About Form 1040-X page covers the mechanics, and our guide to amending a wrong US expat return with Form 1040-X explains the expat-specific points. Meanwhile, consider paying the undisputed part of the CP22A notice, because a later refund will include interest only at the overpayment rate.
Payment Plans for Larger Balances
If you agree with the bill but cannot pay it at once, the IRS offers short-term plans of up to 180 days and longer instalment agreements. The IRS page on payment plans and installment agreements explains the fees and thresholds. Interest continues during any plan, and the late-payment penalty rate can halve to 0.25% a month while an instalment agreement is in force. For wealthy clients, however, a plan is usually a short bridge rather than a strategy, because 7% compounding is expensive borrowing.
Refund Offsets Across Years
Where you amended several years, one year may produce a refund while another produces a CP22A notice. The IRS will generally apply the refund against the balance due, and a separate CP49 letter confirms the offset. Our guide to the IRS CP49 refund offset notice explains how to read it. Accordingly, before wiring any money, check whether a pending refund will cover part of the bill.
Case Study: A London Fund Manager's CP22A Notice
This illustrative case is drawn from the pattern we see most often, with details changed. Eleanor, a US citizen working as a portfolio manager in London, held three UK OEICs in a general investment account. In January 2023 she sold them for a gain of £95,000. Her original 2023 return, filed in June 2024, reported the sale as a simple long-term capital gain.
What the Amended Return Changed
In 2026, a review of her missed reporting showed the funds were passive foreign investment companies. We reworked the sale on Form 8621 under the excess distribution rules, spreading the gain across her holding period. We also confirmed that the UK capital gains tax she had paid was correctly claimed on Form 1116. Even so, the amendment raised her 2023 US tax by $18,400, including the PFIC interest charge. She filed the 1040-X on 20 May 2026 but chose not to pay with it, preferring to wait for the bill.
What the CP22A Notice Showed
The CP22A notice was dated 19 October 2026 and reached her London flat on 4 November. It showed the $18,400 tax increase plus about $3,700 of interest, calculated from 15 April 2024 at compounding rates of 7% to 8%. Had she wired the tax with the 1040-X in May, interest would have stopped at roughly $3,070. Her decision to wait therefore cost about $630.
How We Resolved It
Her 2024 amended return had produced a refund of $4,200, which the IRS was holding. We confirmed the offset would apply, so she wired the net balance of about $17,900 from a dollar account on 6 November, inside the 21-day window. As a result, no failure-to-pay penalty arose. Her UK position was unchanged, because the additional US tax related to UK-source gains on which the UK had already collected its own tax.
The UK Side of a CP22A Notice
Paying more US tax rarely produces any UK relief for a UK-resident American. Under the US-UK double taxation convention, the US is expected to give way on UK-source income through its foreign tax credit. Consequently, HMRC will not normally credit extra US tax charged on UK-source investment income or gains.
Why a Large CP22A Notice Can Signal Double Tax
If a CP22A notice reflects significant US tax on income the UK already taxed, the credit calculation deserves a second look. Often the extra tax is legitimate, such as the PFIC interest charge, which the credit cannot fully absorb. However, it can also mean the amended Form 1116 missed UK tax that was available. The HMRC Self Assessment guidance on foreign income explains the UK reporting side, and both returns should tell the same story.
Keeping Both Sets of Records Aligned
Additionally, keep the CP22A, the amended return and the payment confirmation together with your UK tax return for the same period. HMRC enquiries into foreign tax credit relief sometimes ask for evidence of US tax actually paid. A tidy file makes that request quick to answer.
How TaxYork Can Help
TaxYork provides comprehensive US tax return preparation for Americans in Britain, including amended returns, PFIC calculations and the follow-up IRS correspondence. When a CP22A notice arrives, we reconcile it to the 1040-X and the IRS transcript, confirm whether interest and penalties are correct, and arrange payment instructions that post to the right year. Furthermore, where the bill reveals wider missed reporting, we prepare the FBARs, Form 8938 and later-year returns needed to bring the whole position up to date.
Our team works across both systems every day. As a result, we check that the US correction and your UK Self Assessment agree, so a fix on one side does not create a problem on the other.
Conclusion
A CP22A notice is the IRS accepting your own correction and sending the bill. The tax itself is rarely a surprise, but the interest is, because it runs from the original April deadline. Therefore, the most valuable steps are paying with the amended return where possible, checking the notice against the 1040-X and your transcript, and paying inside the 21-day window in dollars, with the right reference. Above all, treat the letter as a prompt to confirm that the rest of your US reporting is complete.
Contact Us
If a CP22A notice has arrived and you want the figures checked before you pay, contact us for a confidential review. You can also email hello@taxyork.com or call 020 3488 8606. We will reconcile the notice to your amended return, confirm the interest, and arrange payment from the UK without missing the deadline.
Disclaimer
This article provides general information about US and UK tax rules as they stood in November 2026. It is not tax or legal advice for your circumstances, and rates, thresholds and IRS procedures can change. The case study is illustrative, with details changed. Before acting on any IRS notice, consult a qualified US-UK tax specialist who has reviewed your returns and account transcripts.