IRS Notice Guide

CP523 Notice: IRS Intent to Terminate Your Installment Agreement

By Ray Neu, Publisher | Last reviewed: October 26, 2026 | Reading time: 9 min

Short answer

A CP523 tells a taxpayer that an IRS installment agreement is in default and that the IRS intends to terminate it and levy. Under 26 U.S.C. § 6159(b)(5), notice of a termination must come at least 30 days before it takes effect and explain why. The IRS asks for contact no later than 30 days from the notice date.

This page covers the notice itself: why it is sent, the dates it sets, what can follow, reinstatement, and the appeal route. Plan types, setup fees and how to apply are in the installment agreement guide.

Deadline to know: The IRS CP523 page asks for contact “no later than 30 days from the date of the notice,” and IRM 5.14.11.4 says the agreement is not terminated until that period ends. Publication 1660 allows a Collection Appeals Program request within 30 days of the notice and for 30 more days after termination.

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What a CP523 notice is

The IRS page says that a CP523, CP523 (SP) or CP623 means “the IRS is informing you of the intent to terminate your installment agreement and seize (levy) your assets,” because the taxpayer has “defaulted on your agreement.” IRM 5.14.11.4 names it the Installment Agreement Default Notice, Notice of Intent to Levy, sent on agreements the IRS monitors through its IDRS system. The IRM applies the same 30-day and 90-day rules to Letter 2975 (DO).

IRM 5.14.11.4 says the notice goes by certified mail to domestic addresses and registered mail to foreign ones, and that spouses on a joint agreement each receive one separately, even at the same address.

Under § 6159(b)(5), except in jeopardy, the IRS may not modify or terminate an agreement unless notice comes at least 30 days before the action and explains why. 26 CFR 301.6159-1(e)(4) adds that the taxpayer “may provide information showing that the reason for the proposed modification or termination is incorrect.”

Why the IRS sends a CP523

The CP523 page does not list reasons; it says “The notice tells you why we are taking this action.” IRM 5.14.11.3 lists the grounds on which the IRS may propose termination:

A missed installment. Failing to pay an installment when due, under § 6159(b)(4)(A).
A new balance. Failing to pay another tax liability when due, under § 6159(b)(4)(B), including balances under related taxpayer numbers, such as a sole proprietor’s business and individual accounts.
A requested financial update. Failing to provide an updated financial statement on request, under § 6159(b)(4)(C).
Inaccurate information. Inaccurate or incomplete information given before the agreement, under § 6159(b)(2)(A).
A modified payment. Failing to pay an amount modified after a financial review.

Under § 6159(b)(2) and (3), the statute also covers jeopardy and a financial condition that “has significantly changed.” IRM 5.14.11.3 says agreements “may not be defaulted nor terminated for reasons other than those listed” and that Affordable Care Act shared responsibility payments do not default an agreement.

Unfiled returns: the sources differ

The IRS payment plans page lists filing all required returns on time among the ways “to avoid default.” IRM 5.14.11.3, by contrast, notes that an open delinquent return can coexist with an active agreement and “does not cause default” of the plan balances. Neither § 6159(b) nor 26 CFR 301.6159-1(e) names an unfiled return as a ground.

The dates a CP523 sets

IRM 5.14.11.4 lays out a timeline that starts on the notice date:

When	What the IRM or the law says
Notice date	A 30-day period to comply begins; the plan is in default but not yet terminated
Within 30 days	Contact the IRS or request a CAP appeal; the IRM allows 15 extra days for mailed appeals
Day 30	The termination date of record, unless the default is cured or appealed
Next 30 days	No levy under § 6331(k)(2)(D); a CAP appeal is still available if none was made earlier
90 days after mailing	End of the IRM’s no-levy window for the plan’s periods; with no response, the account leaves installment status about 13 weeks after mailing

If the plan is not reinstated, IRM 5.14.11.4 says the systemic reversal of installment status returns a reduced failure-to-pay rate to one-half (0.5) percent. Section 6651(h) allows the reduced 0.25 percent rate only while an agreement is in effect, for individuals who filed on time.

Questions about a CP523 date or reason?

An attorney can review the notice, the reason it gives, and whether reinstatement or an appeal fits the facts.

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What the IRS says can follow

The CP523 page says that without a response, “we will terminate your installment agreement and begin taking collection action, which can include filing a federal tax lien or seizing (levying) your wages and/or bank accounts.”

Levy and the hearing notice

Section 6330(a) bars a levy unless the IRS has given written notice of the right to a hearing at least 30 days before the first levy, a notice “required only once for the taxable period.” Publication 1660 lists exceptions, including jeopardy and state tax refund levies. If the LT11 or Letter 1058 hearing notice has not already been sent for the plan’s periods, that notice is the next step before most levies; see the LT11 and Letter 1058 guide.

Lien

IRM 5.14.11.6 says a Notice of Federal Tax Lien may be filed as soon as the CP523 is mailed if the taxpayer was told at approval that one “may be filed if this agreement defaults,” or if the government’s interest is at risk. Otherwise a lien notice “should not normally be filed for 90 days after” the CP523. The Form 668(Y)(c) guide explains the lien document.

Reinstatement and its fee

The CP523 page says paying “before your termination date” keeps the agreement in place, and that reinstatement may require a fee or full payment of any new tax liability. A taxpayer who already corrected the problem is asked to call so the IRS has a record.

IRM 5.14.11.5 says an agreement in default but not yet terminated “must be reinstated” if the taxpayer remedies the default, unless another reason for default exists. It allows reinstatement without managerial approval or a financial statement when a new liability adds no more than two monthly payments and stays within the collection statute, or when the plan meets streamlined criteria with no default in the prior 12 months.

Fees as of October 2026

The IRS payment plans page (fee section updated March 3, 2026) lists charges to change an existing plan, and lists “Reinstate after default” among the online changes:

Online: $6
Phone, mail or in person: $89
Low income: $6 online or $43 otherwise, which “may be reimbursed if certain conditions are met”

The IRS online payment agreement page agrees, listing a $6 fee to revise a plan “or reinstate after default.” Two other official sources read differently. 26 CFR 300.2, as published by Cornell LII, sets the reinstatement fee at $89, or $43 for low-income taxpayers, with no online rate. The IRM 5.14.1 fee table effective July 5, 2026 shows the $6 online fee under a low-income label and $89 for “All other reinstatement/restructuring.”

Levy protection after termination and during an appeal

Section 6331(k)(2)(D) bars a levy for 30 days after the IRS terminates an agreement and, if an appeal is filed within those 30 days, while it is pending. 26 CFR 301.6159-1(f) repeats the rule and lists three exceptions: a written waiver, a finding that the request was “solely to delay collection,” and jeopardy.

The IRM’s 90-day administrative pause is longer than the statutory 30 days. Under 26 CFR 301.6159-1(g), the 10-year collection period of § 6502 is suspended for 30 days after a termination and while Appeals considers a timely appeal.

Appealing a CP523 through the Collection Appeals Program

The CP523 page says a taxpayer who still disagrees after calling “can request a hearing with the IRS Independent Office of Appeals,” and § 6159(e) requires independent review of terminations. Publication 1660 and Form 9423 describe the steps:

Call first. Publication 1660 says to call the number on the notice and, if the matter is not resolved, explain that an appeal is wanted.
Put it in writing when required. A written request is needed if a revenue officer sent the notice, preferably on Form 9423, Collection Appeal Request, which has a box for “Termination of Installment Agreement.”
Watch two windows. 30 days from the notice date, then 30 more after termination. An appeal made before termination cannot be repeated once it takes effect, and IRM 5.14.11.7 allows 15 days of mailing time for each Form 9423.
Send it to the right office. The Form 9423 instructions say to give it to the office or revenue officer that acted on the agreement within 30 calendar days, and never directly to Appeals.

Sources differ on writing: Publication 1660 says the request “need not be in writing” unless a revenue officer sent the notice, while the Form 9423 instructions say a taxpayer who disagrees “should appeal by completing a Form 9423.” Under Publication 1660, the existence or amount of the tax cannot be challenged in CAP, and the Appeals decision binds both sides with no court review.

When an attorney matters

The CP523 page notes that a taxpayer can authorize someone to contact the IRS and points to Low Income Taxpayer Clinics. Form 9423 has a representative line and asks for a copy of Form 2848, Power of Attorney, and Publication 1660 lists attorneys, certified public accountants and enrolled agents as CAP representatives. Differences appear in a few places:

No court after CAP. Form 9423 asks the taxpayer to explain the disagreement and how the tax problem would be resolved, and the CAP decision is final.
Privilege. Section 7525 extends attorney-style confidentiality to federally authorized tax practitioners only in noncriminal tax matters.
A later hearing notice. An LT11 or Letter 1058 opens a Collection Due Process hearing, whose determination Publication 1660 says can be contested in the U.S. Tax Court. That court admits attorneys by application and nonattorneys who satisfy its Rules, including an examination.

The attorney vs CPA vs enrolled agent comparison covers the roles in more depth.

Related guides

Frequently Asked Questions

What does a CP523 notice mean?

It means the IRS treats an installment agreement as in default and intends to terminate it and levy. Section 6159(b)(5) requires this kind of notice at least 30 days before termination, with an explanation of the reason.

How long is there to respond to a CP523?

The IRS CP523 page asks for contact no later than 30 days from the date of the notice, and IRM 5.14.11.4 says the agreement is not terminated before then.

Can a defaulted installment agreement be reinstated?

The CP523 page says to contact the IRS to see whether it can be. IRM 5.14.11.5 says an agreement that is in default but not yet terminated must be reinstated once the default is cured, unless there is another reason for default.

How much does it cost to reinstate an IRS payment plan?

As of October 2026, irs.gov lists $6 online and $89 by phone, mail or in person, with low-income charges of $6 or $43. The regulation at 26 CFR 300.2 sets $89, or $43 for low-income taxpayers.

Can the IRS levy right after a CP523?

IRM 5.14.11.4 says no levy issues on the plan’s tax periods for 90 days after mailing. Section 6331(k)(2) bars a levy for 30 days after termination and during a timely appeal.

Talk through a CP523 before the termination date

A free, confidential evaluation can help sort out whether reinstatement, a revised plan or an appeal is available under the law.

Start Your Free Evaluation Call (202) 968-1121

About the Author

Ray Neu

Ray Neu is the publisher of IRSAttorneys.net. A former law enforcement officer with a background in criminal justice and digital publishing, he oversees editorial direction, partnership standards, and compliance review for the site. He is not an attorney and does not provide legal advice; all tax law content is sourced and reviewed against the standards documented on the Editorial Team & Standards page.

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Sources

IRS Circular 230 Disclosure: To ensure compliance with Treasury Department rules governing tax practice, any tax information contained on this website was not written and is not intended to be used, and cannot be used, for the purpose of avoiding any federal tax penalty. You should consult a licensed tax professional regarding your individual situation.

Results described on this website are not a guarantee, warranty, or prediction of the outcome of any tax matter. Every situation is different. Prior results do not guarantee a similar outcome. Article content reflects general information about federal tax procedure as of the last reviewed date and may not reflect subsequent changes in IRS policy, regulations, or case law.