IRS Notice CP518: What it means and what to do next

The IRS describes Notice CP518 as its “final reminder” that it still has no record of one or more required prior-year tax returns. If you receive one, check whether the return was required and whether it has already been filed, then respond promptly rather than assuming the issue will disappear.

2026 update: The IRS updated its CP518 guidance in March 2026, and current IRS procedures continue to provide for the issuance of CP518 in unresolved individual return-delinquency cases.

Published on: August 25, 2026
Written by: Rose-ann De Villa

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Key takeaway: IRS Notice CP518

Your situation	What the IRS says to do
Filed within the last eight weeks	No further action solely because of CP518
Filed more than eight weeks ago	Send Form 15103 with a signed and dated copy of the return
Not required to file	Explain why using Form 15103
Required to file but did not	Prepare the return, complete Form 15103 and assess the wider compliance position

Last updated: August 2026

What is IRS Notice CP518?

CP518 is an IRS return-delinquency notice sent when a prior-year tax return still appears to be missing after earlier contact about the filing issue. The IRS’s current guidance describes CP518 as a final reminder because it still has no record that the taxpayer filed the prior-year return or returns.

You might genuinely have an unfiled return. But there are other possibilities: perhaps you recently filed it, the IRS has not yet processed it, or you believe you were not required to file at all. The notice gives you a chance to clarify which situation applies before the non-filer process potentially moves further.

Why did I receive a CP518 notice?

You generally receive a CP518 notice because the IRS believes you were required to file a tax return and still cannot find a record of that return.

In practice, one of four situations usually needs to be resolved:

You were required to file but did not.
You filed recently, and the return has not yet posted to your IRS account.
You filed earlier, but there is a processing or identifying-information issue.
You believe you did not have a filing requirement for that year.

Living outside the United States does not automatically remove US tax filing obligations. Whether a return was actually required depends on the taxpayer’s circumstances, so it is better to establish that first rather than simply assuming the IRS notice is wrong.

Is CP518 a final notice from the IRS?

CP518 is the IRS’s final reminder about the missing-return issue, but it is not necessarily the final action the IRS can take.

“Final reminder” does not mean that CP518 is the end of every possible IRS process. It means the IRS considers this the final reminder within this stage of the return-delinquency process. If the issue remains unresolved, the IRS says it may determine the taxpayer’s tax for them. Penalties and interest may also continue to accrue where applicable, and an expected refund can be delayed.

So CP518 deserves attention, but panic is not especially useful. The better response is to establish exactly what is missing and choose the correct way to resolve it.

What is the difference between CP59 and CP518?

CP59 is generally an earlier notice that a personal tax return appears to be missing, while CP518 is the final reminder that the filing issue remains unresolved.

IRS notice	What it generally means
CP59	The IRS has no record that you filed a prior-year personal tax return
CP518	The issue remains unresolved, and the IRS is issuing its final reminder

Current IRS internal procedures state that a CP518 will generally be issued if a return does not post or the open return-delinquency case is not closed within eight weeks of the CP59.

What should I do after receiving IRS Notice CP518?

If you were required to file and haven’t done so, the IRS instructs you to file the return and complete Form 15103 explaining why it is late.

Here’s what to do, step by step:

Check the tax year on CP518. Make sure you are addressing the correct return.
Confirm that you had a filing requirement. This matters particularly if you were living abroad.
Prepare the missing return accurately. Foreign income, accounts, pensions, businesses, or investments may create additional reporting requirements, such as FBAR, Form 8938, and international information returns.
Complete Form 15103 and follow the response instructions on your notice.
Deal with any wider filing problem at the same time. If several years are missing, fixing only the year shown on CP518 may not fully resolve your US compliance.

If you cannot pay the full tax shown on the late return, that is not a reason to leave the return unfiled. The IRS specifically says to file anyway; payment arrangements may be available for the balance.

If the return has already been filed

If you filed the return within the last eight weeks, the IRS currently says you do not need to take further action solely because you received CP518.

If more than eight weeks have passed since you filed the return, the IRS instructs you to complete Form 15103 and send a signed and dated copy of the return. Check that your name, Social Security number, and tax year match the information on the notice.

That eight-week distinction is useful because receiving CP518 shortly after filing does not automatically mean the return has gone missing.

If you were not required to file

If you believe no return was required, you can use Form 15103 to explain why.

The IRS currently allows taxpayers who are sending Form 15103 only to explain why they did not have to file to submit the form online through an IRS Online Account. Otherwise, taxpayers should follow the mailing or fax instructions on their individual notice.

Tip: Avoid responding with a bare statement such as “I live overseas, so I didn’t need to file.” Residence abroad, on its own, is not enough to establish whether a US return was required.

What happens if I ignore CP518?

If CP518 remains unresolved, the IRS may calculate tax for you using information available to it, while applicable penalties and interest can continue to build.

The IRS’s current CP518 guidance says that if it does not hear from the taxpayer, it may determine the tax itself. That can eventually lead into the broader Substitute for Return, or SFR, process.

The IRS’s current list of past-due-return notices includes CP2566, which tells a taxpayer that the IRS has calculated tax, penalties, and interest using wages and other income reported by employers, financial institutions, and other third parties.

An IRS-prepared substitute return may not produce the same result as a properly prepared return. Current IRS guidance says that even after the IRS files a substitute return, taxpayers generally remain better off filing their own return so the account can reflect the correct exemptions, credits, and deductions for which they qualify.

So while CP518 does not mean an SFR has already been prepared, leaving the notice unanswered can allow the non-filer process to move in that direction.

Does CP518 mean the IRS is auditing me?

No. Receiving CP518 by itself does not mean the IRS has started a civil examination or audit. CP518 is a return-delinquency notice. Its purpose is to resolve a tax return the IRS believes is missing.

That distinction becomes especially important for US expats considering the Streamlined Filing Compliance Procedures.

An IRS notice asking for an unfiled return and an IRS examination of your tax returns are not the same thing. However, if the situation progresses and the IRS formally begins an examination, your available compliance options can change.

Can US expats use the Streamlined Procedures after receiving CP518?

Receiving CP518 does not, by itself, automatically disqualify an eligible taxpayer from using the Streamlined Filing Compliance Procedures.

The IRS’s Streamlined eligibility criteria focus instead on issues such as non-willful conduct and whether an IRS examination or criminal investigation has already begun.

For taxpayers residing outside the US, the Streamlined Foreign Offshore Procedures generally require eligible filers to submit the most recent three years of delinquent or amended US tax returns for which the filing deadline has passed, along with required information returns, and the most recent six years of delinquent FBARs where applicable.

The full amount of tax and interest due in connection with those returns must also be paid.

The critical timing rule is this:

If the IRS has already initiated a civil examination of the taxpayer’s returns for any taxable year before the Streamlined submission, the taxpayer is not eligible to use Streamlined. The same applies if the taxpayer is already under an IRS Criminal Investigation.

CP518 does not itself close the Streamlined door. However, eligibility ends if the IRS initiates a civil examination before the Streamlined submission or the taxpayer becomes subject to an IRS Criminal Investigation.

Does receiving CP518 affect the Streamlined non-willfulness requirement?

CP518 does not automatically make someone’s prior non-compliance willful, but Streamlined still requires the taxpayer to certify that the failures resulted from non-willful conduct.

The IRS defines non-willful conduct for Streamlined purposes as conduct resulting from negligence, inadvertence, mistake or a good-faith misunderstanding of the law.

The IRS does not state that receiving CP518 automatically makes earlier non-compliance willful.

However, there is a practical nuance here. Once someone has received correspondence telling them that the IRS believes a return is missing, their subsequent actions become part of the factual timeline surrounding their compliance.

That does not mean “CP518 = willful.” It does mean that someone considering Streamlined should be careful about delaying further and should make sure any non-willfulness certification accurately explains their circumstances.

Can the IRS audit a return filed through the Streamlined Procedures?

Yes. A Streamlined submission is not automatically audited, but it can later be selected for examination under normal IRS audit-selection procedures.

The IRS says Streamlined returns are processed like other returns and are not automatically subject to audit. They may nevertheless be selected for examination or checked against information obtained from banks, financial advisers and other sources.

When should I get professional help with a CP518 notice?

Professional advice can be particularly useful when CP518 is only one part of a larger US tax compliance issue. Consider getting specialist US tax advice if:

You have multiple unfiled tax years
You were unaware of your US filing obligations while abroad
You may have missed FBARs or international information returns
You are considering the Streamlined Foreign Offshore Procedures
You are unsure whether your circumstances support a non-willfulness certification
The IRS has contacted you beyond ordinary non-filer notices or may have begun an examination

The main thing is not to treat CP518 as just another reminder to put aside. It is the IRS’s final reminder at the return-delinquency stage, and the options available today may be more useful than the options left after the case progresses further.

Frequently Asked Questions

Can an unfiled return affect my refund for another tax year?
Yes, the IRS can hold an income tax refund while one or more required prior-year returns remain unfiled.

The IRS says it may hold the refund until it receives the past-due return or accepts an explanation showing that you were not required to file. In some cases, the IRS may issue a separate CP63 notice explaining that the refund is being held.

Can I still claim a refund if CP518 relates to an old tax return?
Possibly, but there is a time limit for claiming many refunds on late-filed returns. The IRS generally requires a taxpayer who is due a refund from withholding or estimated tax payments to file the return within three years of its original due date to claim that refund. Similar timing rules can affect refundable tax credits. Exceptions can apply, so an older return should be reviewed before assuming that any refund has been lost.

Can late-filing penalties be reduced after receiving CP518?
Potentially. Filing late can result in penalties, but some taxpayers may qualify for IRS penalty relief. AEP applies only to eligible original returns beginning with the 2025 tax year and generally requires a timely filing and payment history for the previous three years. It may therefore not apply when CP518 concerns an older return or several years remain unfiled. Depending on the circumstances, First Time Abate, reasonable-cause relief, or the penalty protections available through the Streamlined Foreign Offshore Procedures may be more relevant.

How long does the IRS take to process a past-due return?
Six weeks is the IRS’s general processing estimate. Eight weeks is the point at which the CP518 guidance instructs taxpayers to take additional action if the return still has not appeared.

What if CP518 was sent to my old address while I was living abroad?
You should still address the CP518 issue and make sure the IRS has your current mailing address. US taxpayers who move, including those changing their overseas address, can use Form 8822, Change of Address, to notify the IRS of a new home mailing address. Updating your address can also reduce the risk of missing future IRS correspondence.

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Rose-ann De Villa, IRS Enrolled Agent and CPA, brings 15 years of expat tax expertise in US tax preparation, planning, and advisory for Americans and Green Card holders in the UK.

Rose-ann has been mentioned in the Daily Express UK news wherein she talked about Stimulus payments and Child Tax Credit refunds for US expats in the UK.