IRS CP523: Notice of Intent to Terminate Your Installment Agreement

The IRS intends to terminate your payment plan. Review the default and appeal deadline.

Your deadline

30 days to cure the default before your agreement is terminated

Follow CP523's deadline to address the default or request a CAP appeal. Levy is generally restricted during the proposed-termination period and a timely pending appeal.

How soon to act: Critical

What this notice means

CP523 notifies you that the IRS intends to terminate your installment agreement. Review the stated default, remaining balance and response date before the proposed termination takes effect.

Common reasons you received CP523: you missed scheduled payments; you filed a return late while the agreement was active; or you incurred a new tax balance that violated the terms of your plan.

You can challenge the proposed termination through the Collection Appeals Program (CAP). Follow the notice's instructions and deadlines; Form 9423 is the CAP request form.

How it works

1
Reinstate your payment plan — the IRS may allow a one-time reinstatement if you have a good payment history
2
Request a new agreement if reinstatement is not available — a tax professional can negotiate revised terms
3
Show reasonable cause for missed payments — documented hardship can support a request to reinstate without penalty

Other options

Consider a Collection Appeals Program (CAP) appeal using Form 9423; follow the appeal deadline printed on CP523.

If you do nothing

Levy your wages or bank accounts without sending additional notices
Declare your agreement no longer active and demand the full balance
File a federal tax lien if not already in place
Assign the account to a Revenue Officer for accelerated enforcement

Which sounds like you?

Installment Agreement

Reinstate or renegotiate your payment plan before enforcement begins

Currently Not Collectible

If your financial situation has changed dramatically, CNC may apply

Offer in Compromise

If the total balance is unmanageable, explore a settlement

Penalty Abatement

Reduce the balance that triggered the default if penalties are the issue

Common questions

What causes a CP523 default?

Missing a scheduled payment, incurring a new tax balance without notifying the IRS, failing to file a required return while the agreement is active, or failing to pay current-year taxes as they come due.

Can the IRS reinstate my installment agreement after CP523?

Yes. The IRS may allow reinstatement — especially for a first-time default with an otherwise good payment history. You must request this before the 30-day window closes.

What if I can't make the payment within 30 days?

Contact the IRS or have a tax professional do so immediately. Options include a brief extension, modification of payment amounts, or exploring alternative resolution like CNC or OIC.

Does CP523 affect my right to appeal?

If you previously received a CDP hearing notice, your appeal rights may be limited. A tax professional can help you determine what appeal options remain.

Can I appeal the proposed termination?

You may request a Collection Appeals Program (CAP) appeal using Form 9423. Follow the deadline and contact instructions on your notice.