- A CP523 notice signals that the IRS intends to terminate your installment agreement due to default and may begin collection actions such as levies.
- The IRS instructs taxpayers to contact the number on the notice within 30 days of the notice date and make any missed payments to avoid termination.
- If you disagree with the termination reason or have already corrected the default, the IRS advises calling to discuss and potentially appeal to the Independent Office of Appeals.
For background on this issue, read our IRS payment plans guide.
Understanding the CP523 Notice
According to the IRS, a CP523, CP523 (SP) or CP623 notice informs the recipient that they have defaulted on their installment agreement. The notice states the agency's intent to terminate the agreement and begin collection actions, which may include filing a federal tax lien or seizing wages and bank accounts.
The notice also references potential denial or revocation of a U.S. passport under the Fixing America’s Surface Transportation (FAST) Act if the tax debt is considered seriously delinquent. The IRS provides additional passport certification details on its website.
The evidence desk notes that this communication is not an immediate levy but a warning that gives the taxpayer time to respond before further enforcement proceeds.
Immediate Actions Recommended by the IRS
The IRS guidance states that recipients should make any missed payment before the termination date listed on the notice to prevent the installment agreement from ending. Taxpayers can use the IRS payments page to submit payment or explore other options.
Contacting the IRS right away is emphasized. The agency directs individuals to call the telephone number printed at the top of the notice as soon as possible, but no later than 30 days from the date of the notice.
During the call, a customer service representative will discuss what is needed to resolve the issue. This may involve paying a reinstatement fee or addressing any new tax liability in full, according to IRS materials.
Republic Tax Relief provides private tax-resolution services for individuals and businesses facing IRS or state tax issues. Readers with existing tax-debt questions separate from this notice may contact the firm for a free, no-obligation initial consultation to evaluate suitability, scope, fees and availability of help communicating with the IRS.
What to Do If You Disagree or Have Already Acted
If you do not agree with the IRS reason for terminating the installment agreement, the IRS instructs you to contact the number on the notice. Should the discussion not resolve the disagreement, you have the right to request a hearing with the IRS Independent Office of Appeals.
The IRS also advises that if corrective action has already been taken, such as making the missed payment, you should still call to ensure the agency has recorded it so the agreement can be reinstated.
Failure to respond, per IRS guidance, will result in termination of the agreement and the start of collection actions.
Context on Installment Agreements and Defaults
The IRS explains that an installment agreement is a payment plan to pay taxes owed over time. Defaulting on payments can lead to termination, after which interest and penalties continue to accrue until the balance is paid in full.
When an agreement is proposed for termination, the IRS notes that the collection statute is suspended for 30 days, providing a limited window for response or appeal.
IRS guidance checked .
General information only, not individual tax, legal, or financial advice. Rules, deadlines, and eligibility depend on your circumstances. Check current official guidance or consult a qualified professional.
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