IRS CP523 Notice: Intent to Terminate Your Payment Plan
Last reviewed by Calculus Tax in-house Settlement Officer
A CP523 (or CP623) means you have defaulted on your IRS installment agreement, and the IRS intends to terminate it and levy your wages or bank accounts. Make the payment before the termination date on the notice, and contact the IRS as soon as possible, no later than 30 days from the notice date, to reinstate the agreement.
Quick answer
A CP523 means you defaulted on your IRS installment agreement, and the IRS intends to terminate it and levy your wages or bank accounts. Make the missed payment before the termination date and contact the IRS no later than 30 days from the notice date to reinstate the plan. Reinstatement may require a fee or paying new tax in full.
| What it is | Notice of intent to terminate your installment agreement and levy |
|---|---|
| Deadline | Contact the IRS no later than 30 days from the notice date |
| Reinstate online | $6 fee for individuals |
| Common default causes | Missed payment, unfiled returns, or unpaid new taxes |
| Levy timing | Generally not for 30 days after termination or during an appeal |
| Appeal | IRS Independent Office of Appeals |
What the CP523 Means
The CP523, CP523 (SP), or CP623 informs you that the IRS intends to terminate your installment agreement and seize (levy) your assets because you defaulted. The notice explains why. It also explains that the State Department can deny or revoke a passport for seriously delinquent tax debt.
Your Deadline
Make your payment before the termination date on the notice to prevent the agreement from being terminated. The IRS says to contact it as soon as possible, and no later than 30 days from the date of the notice, using the number at the top of the notice.
Why Payment Plans Default
To keep a plan in good standing, the IRS requires you to pay at least the minimum monthly payment on time, file all required returns on time, and pay new taxes in full and on time. Missing any of these can put the plan in default. A refund applied to your balance does not count as a monthly payment.
How to Reinstate the Agreement
Contact the IRS right away to see if you can reinstate. You may have to pay a reinstatement fee or pay any new tax liability in full. Individuals can reinstate after default through the online payment agreement tool for a $6 fee. More detail is in payment plan default and reinstatement.
If You Disagree or Already Fixed It
If you disagree with the reason for terminating your agreement, call the number on the notice. If you still disagree after talking with the IRS, you have the right to appeal and can request a hearing with the IRS Independent Office of Appeals. If you have already taken corrective action, still call so the IRS has a record and can reinstate the agreement.
What Happens If You Do Not Respond
The IRS will terminate the agreement and begin collection, which can include filing a federal tax lien or levying your wages or bank accounts. The IRS generally will not levy for 30 days after an agreement is terminated, or while it evaluates an appeal of the termination. See IRS bank levies and wage garnishment.
If the Payment Is No Longer Affordable
If you defaulted because the payment is too high, ask to change it. Individuals can revise the payment online; if the new amount is below what the IRS accepts automatically, the IRS will ask for Form 433-F or 433-H. See how to lower your IRS payment plan and currently not collectible status.
Help With a CP523
Calculus Tax reviews your IRS account with Brevitax to find what caused the default, and our in-house Settlement Officer reviews a reinstatement or revised plan you can keep. Contact us before the termination date.
Frequently Asked Questions
How 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 shown.
Can I reinstate my payment plan online?
Individuals can reinstate after default through the IRS online payment agreement tool, which charges a $6 fee. You may also need to pay new tax in full.
What if I already made the missed payment?
Call the IRS anyway so it has a record of your corrective action and can reinstate the agreement.
Will the IRS levy right away?
Not before the agreement is terminated. The IRS generally does not levy for 30 days after termination or while an appeal of the termination is pending.
Can I lower my payment instead of defaulting?
Yes. Ask to revise the plan. If the new amount is below what the IRS accepts automatically, it will request financial information.
Does a CP523 affect my passport?
The notice explains that the State Department can deny or revoke a passport for seriously delinquent tax debt, so resolving the default matters.
Sources
What can change the answer
Notice type, issue date, filing history, account status, deadlines, and current agency procedures can change the available next step. Bring the complete notice and account records to a qualified review.
Tax rules and collection procedures can change and depend on the account. Federal claims should be checked against current IRS guidance; California claims should be checked against the California Franchise Tax Board. See our editorial methodology for sourcing and update standards.
Results depend on your facts and on IRS or state decisions. Calculus Tax, Inc. is not affiliated with the IRS or any government agency.
When professional help may make sense
Calculus Tax, Inc. can review notices, organize financial information, explain available paths, and communicate with the IRS or California agencies when representation is appropriate. The right next step depends on your facts, deadlines, filing history, and ability to pay.
We are based in Burbank and serve clients in Burbank and throughout Los Angeles County. See our local service-area pages for location-specific information.
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