What Is CP523?

CP523 says you have defaulted on an installment agreement and the IRS intends to terminate it. It is not simply a reminder of your next monthly payment. Read the stated reason and the termination information carefully.

The IRS CP523 instructions say to contact the agency promptly and no later than 30 days from the notice date. Use your actual notice's dates.

Find the Reason Before Trying to Fix It

A missed payment, filing problem, or new balance may require different action. Put the default explanation beside your original agreement and current records.

  • For a payment issue, collect the due date, debit history, and confirmation of any catch-up payment.
  • For a filing issue, collect the return and submission evidence.
  • For a new balance, identify the tax year and whether it is covered by the existing agreement.

Ask the IRS what corrective action is required and how reinstatement will be confirmed. A payment alone should not be treated as proof that the agreement is active again. Reinstatement may involve a fee or other requirements.

If You Disagree with Termination

Contact the IRS with supporting records. If the dispute remains, follow the notice's appeal instructions. Proposed termination and actual termination have appeal rules; do not treat this as an ordinary CDP levy notice or automatically use the wrong form.

IRS Publication 1660 describes installment-agreement appeal rights and levy restrictions. Generally, levy is prohibited for 30 days after termination and while a timely termination appeal is pending, with exceptions. The older idea that levy protection always ends immediately upon termination is too broad.

If the Payment Is No Longer Affordable

Prepare an updated budget with income, essential expenses, assets, and other obligations. Explain the change when asking about modification or other options. Do not promise a larger payment simply to end a difficult phone call.

What to Keep

Retain the CP523, original agreement, payment and filing records, notes of conversations, appeal submissions, and any written reinstatement confirmation. If you receive a separate LT11 or CP90, preserve those deadlines separately.