IRS CP523
Installment Agreement Terminated
Your IRS payment plan has defaulted — levy action can begin without further warning.
Deadline
30 days to cure the default before your agreement is terminated
If the default is not cured within 30 days, the installment agreement is terminated and the IRS immediately resumes all collection activity including levies.
Act within days — enforcement is imminent or already in progress.
What IRS CP523 Means
The IRS sends a CP523 when your payment plan has defaulted or been terminated. Once this notice arrives, your agreement is no longer active and the full remaining balance is due immediately.
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.
The IRS does not have to send another round of collection notices after CP523. This notice itself is the final warning — enforcement can begin as soon as the 30-day window closes.
What the IRS Can Do If You Don't Respond
- 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- Declare your agreement no longer active and demand the full balance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
What You Should Do Right Now
- 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
Resolution Options Available to You
Reinstate or renegotiate your payment plan before enforcement begins
If your financial situation has changed dramatically, CNC may apply
If the total balance is unmanageable, explore a settlement
Reduce the balance that triggered the default if penalties are the issue
Frequently Asked Questions About IRS CP523
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.
Professional References
IRC: IRC §6159 — Agreements for Payment of Tax Liability in Installments
IRM: IRM 5.14.2 — Installment Agreements — Default and Termination
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