CP523: the IRS plans to end your payment plan
- What it is
- Intent to end your installment agreement
- Type
- Balance and collection
- Your deadline
- "You should contact us as soon as possible but no later than 30 days from the date of the notice."
- To
- You
- From
- Blaga Veleva, EA
- Re
- Installment agreement default
A CP523 says you have defaulted on your installment agreement and the IRS intends to end it and levy your assets. The plan may still be reinstated. irs.gov says to contact the IRS as soon as possible, but no later than 30 days from the notice date, and to make your payment before the termination date.
What does the CP523 notice mean?
Your IRS payment plan is in default. The IRS says the notice "is informing you of the intent to terminate your installment agreement and seize (levy) your assets." The notice itself tells you why, so read the reason first. It may relate to a missed payment or a new balance.
How much time do I have?
irs.gov states: "You should contact us as soon as possible but no later than 30 days from the date of the notice" (irs.gov CP523 page). Also, make your payment before the termination date on the notice to keep the agreement from ending.
What happens if I ignore it?
The IRS will terminate the agreement and begin collection action. irs.gov lists a federal tax lien or a levy on wages and bank accounts as examples. A proposed termination also extends the IRS collection period by 30 days (irs.gov). See IRS wage levies for what that looks like.
What should I do this week?
- Read the reason for default printed on the CP523.
- Find the termination date and the 30-day contact date.
- Check your bank for a missed or returned payment.
- Check whether a newer tax return left a balance, since new tax may need to be paid in full.
- Call the number printed at the top of the notice and ask to reinstate. Online reinstatement after default has a $6 fee.
- If you already fixed the problem, still call so the IRS records it.
How an Enrolled Agent helps with a CP523
Blaga Veleva, EA can call the IRS for you under Form 2848, find out exactly why the agreement defaulted, and work to reinstate it. irs.gov notes that a fee or full payment of new tax may be required, and she can tell you which applies before you pay anything.
If you disagree with the termination after talking to the IRS, she can request an appeal with the IRS Independent Office of Appeals. She can also check that the payment amount fits your current budget before you agree to it again. If a new tax year caused the default, she can also prepare that return or plan for next year's tax. Visit her FM 1960 office in north Houston, or send the CP523 through the secure portal.
Which notice usually comes next?
If the agreement ends, the next letters are collection letters. A lien filing comes with Letter 3172. Before most levies, the IRS sends a final Notice of Intent to Levy and Your Right to a Hearing, such as the LT11 or Letter 1058.
Not in the decoder yet. Read it to us.
Call (281) 785-0460 Send it to us
That does not mean it is unusual. The IRS sends many different notices and letters. Read us the number and the date printed on it, and Blaga will tell you what it is and what it asks you to do.
Check the letters before the number too (CP, LT or Letter), in the top right corner. See every letter in the decoder.
Type the number from the top right corner of your letter, for example CP504 or LTR 1058. No number? Try a word like levy, lien or audit.
Which one is it?
Look at the letters printed just before the number, top right of the first page.
Still not sure? Call (281) 785-0460 and read it to us.
Which letter is it?
The number is in the top right corner of the first page, for example CP14 or LTR 1058. Type it above, tap a common one below, or see every letter the decoder covers.
- What it means
- Your deadline
- If it waits
- How an Enrolled Agent can help
Have Blaga read yours Full guide
Source: irs.gov. This is a plain-English summary, not advice on your case.
Questions people ask
Q1What happens if I miss an IRS installment payment?
The IRS can send a CP523 saying it intends to end the agreement and levy. You can usually still contact the IRS, make the payment and ask to reinstate, but do it before the termination date.
Q2Can I reinstate my IRS payment plan after a CP523?
irs.gov says to contact the IRS right away to see if you can. A reinstatement fee may apply, and you may need to pay any new tax in full.
Q3How long do I have to respond to a CP523?
Contact the IRS as soon as possible, and no later than 30 days from the date of the notice. Make your payment before the termination date.
Q4Will the IRS levy my bank account after a CP523?
If you don't respond, irs.gov says the IRS will end the agreement and begin collection, which can include levying wages or bank accounts. Responding within 30 days is how you avoid that.
Q5Who do I call about a CP523?
Call the number printed at the top of your notice. irs.gov says to call even if you already fixed the problem, so the IRS can record your action and reinstate the agreement.