CP523 Notice: IRS Intent to Terminate Your Payment Plan

A CP523 means your IRS installment agreement has gone into default, and the IRS intends to end the agreement and seize (levy) your assets. That sounds alarming, and it should get your attention. But it's also one of the most fixable notices the IRS sends. Most defaults come from a missed payment, a new tax bill or an unfiled return. The IRS says to contact it right away to see if you can reinstate your plan. Its timeline is as soon as possible, and no later than 30 days from the notice date.

Why you got a CP523

The notice tells you why the IRS considers you in default. The IRS's own list of ways to stay in good standing points to the usual reasons:

• A missed or short payment. You didn't pay at least the minimum monthly amount by its due date.
• A new balance. You owe tax on a later return that you didn't pay in full and on time.
• An unfiled return. You didn't file a required return on time.
• A missed financial review. If you have a partial-payment plan, Publication 594 says it's reviewed every two years and you may need to send updated financial information.

Spanish-language versions are labeled CP523 (SP); a similar notice is numbered CP623.

What the CP523 says

• The reason the IRS is taking this action.
• The termination date. Pay before this date to keep the agreement from being terminated.
• The amount you owe, including the missed payment and the full remaining balance.
• What the IRS will do if you don't respond: terminate the agreement and begin collection, which can include a federal tax lien and levies on wages or bank accounts.
• Passport information about seriously delinquent tax debt.
• Your appeal rights, usually with Publication 1660 enclosed.

What to do

Collection is generally paused during this window. The IRS says it will generally not take enforced collection action for 30 days after an installment agreement is terminated, or while it considers an appeal of a terminated agreement. Use that time.

An optional installment agreement kit is available on this site if you need to rebuild your plan request, but you don't need it to call or reinstate online. If you're overwhelmed, a Low Income Taxpayer Clinic or the Taxpayer Advocate Service may be able to help.

What happens if you ignore it

If you don't respond, the IRS says it will terminate your installment agreement and begin collection action. That can include:

• A Notice of Federal Tax Lien, with a Letter 3172 explaining your hearing rights. See federal tax liens.
• Levies on wages and bank accounts. If you haven't already had your chance at a Collection Due Process hearing for those tax periods, you would receive a final notice such as an LT11 first. See IRS levy and wage garnishment.
• Higher penalties. The reduced 0.25% monthly failure-to-pay rate for individuals applies only during an approved plan. Without it, the rate returns to 0.5%, and it can rise to 1% after a notice of intent to levy.
• Passport problems if the debt is large enough to be "seriously delinquent" (over $66,000 for 2026). Debts being paid on time under an approved plan aren't certified. See CP508C.

Is this notice real?

You should recognize the agreement and balance. Check your IRS Online Account, which shows your plan status, due dates and payment history. Call the IRS at a number on IRS.gov if anything looks wrong. Pay only through IRS.gov/payments or by check to the "United States Treasury," never with gift cards. See IRS scams.

IRSV.com is an independent guide and is not affiliated with the IRS. This page is general information, not tax or legal advice. Rules change; confirm details on IRS.gov or with a tax professional. Found an error? Tell us.