IRS notice CP523
CP523 notice: your installment agreement is in default
A CP523, CP523 (SP) or CP623 means you have defaulted on your installment agreement, and the IRS intends to terminate it and seize, or levy, your assets. The notice explains why. You can often keep the agreement if you act before the termination date.
What to do
Make your payment before the termination date on the notice to stop the agreement being terminated. Then contact the IRS right away at the number on the notice to see whether it can be reinstated; you may have to pay a reinstatement fee, or pay any new tax liability in full.
The IRS asks you to contact it as soon as possible, and no later than 30 days from the date of the notice. If you have already fixed the problem, call anyway, so the IRS has a record of it and can reinstate the agreement.
If you disagree
If you do not agree with the reason for terminating the agreement, call the number on the notice. If you still disagree after that, you have the right to file an appeal and to request a hearing with the IRS Independent Office of Appeals.
What happens if you do nothing
The IRS terminates the installment agreement and starts collection action, which can include filing a federal tax lien and levying your wages or bank accounts. The notice also explains that seriously delinquent tax debt can lead the State Department to deny or revoke a passport.
Returns to file before you can set up a plan?
The IRS generally wants every required return filed before it agrees to a long-term payment plan, and a notice can be the first sign that a year is missing. USTAXX prepares current and past-due returns, one year at a time, so the account is complete. We are an IRS Authorized e-file provider and work with clients remotely through a secure portal, by phone or video, and in person at our office in Naperville, IL.
Questions people ask
What does a CP523 mean?
That you defaulted on your installment agreement, and the IRS intends to terminate it and levy your assets unless you act.
How long do I have to respond to a CP523?
The IRS asks you to contact it as soon as possible, and no later than 30 days from the date of the notice. Paying before the termination date on the notice keeps the agreement in place.
Can I reinstate my installment agreement?
Often, yes. Contact the IRS right away; you may have to pay a reinstatement fee, or pay any new tax liability in full.
Where these rules come from
- IRS: Understanding your CP523 notice
- IRS: Publication 1660, Collection Appeal Rights
- IRS: Payment plans and installment agreements
- IRS: Notice 746, Information About Your Notice, Penalty and Interest
General information, current when written, not advice about your situation. Fees and forms change; the official pages above are the authority.