Why you got an IRS CP523
- You missed an installment agreement payment.
- A new return was filed late or with an unpaid balance.
- You incurred a new tax liability after the agreement was signed.
- The IRS reassessed your ability to pay and revised the agreement.
What happens if you ignore this notice
Your agreement will be terminated and the full balance becomes due immediately. Collection actions may resume.
How to respond to a CP523
Recommended completion window: within 30 days of the notice date
- 1
Bring payments current immediately
If a missed payment caused the default, paying within 30 days often reinstates the agreement.
- 2
File any missing returns
Filing compliance is a condition of every installment agreement. File first, then negotiate.
- 3
Call the IRS or request reinstatement online
Use the phone number on the notice. Reinstatement may carry a user fee.
- 4
Renegotiate if you can't afford the existing plan
File a new Form 433-A or 433-F to document hardship and request a lower payment, partial-pay agreement, or Currently Not Collectible status.
Common mistakes with a CP523
- Letting the 30 days lapse — once terminated, restarting collection is harder and the full balance is due.
- Ignoring new-year tax liabilities — adding new debt voids most agreements.
- Sending payment without confirming reinstatement — the IRS still considers the agreement defaulted until they say otherwise.
IRS forms referenced
Form 9465
Installment Agreement Request
View form detailsForm 433-A
Collection Information Statement (Individuals)
View form details
Frequently asked questions about CP523
Can I reinstate a defaulted installment agreement?
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Yes, often. Pay the missed amount, file missing returns, and call the IRS within the 30-day window on the CP523. A reinstatement user fee may apply unless you qualify for low-income relief.
What happens if my installment agreement is terminated?
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The full remaining balance becomes due immediately and the IRS can resume enforced collection — including liens, levies, and wage garnishments — after issuing required notices.
Can I get a new installment agreement after a CP523 default?
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Yes. You can negotiate a new agreement with different terms, especially if your financial situation has changed. Document hardship with Form 433-A or 433-F.
Reviewed by Franklin Sofi, MBA, CPA, CTRS — Founder & Tax Resolution Specialist at Comprehensive Tax Resolution. Last reviewed November 2025.
This page is general information, not legal or tax advice. For specific guidance on your IRS notice, contact a qualified CPA or tax resolution specialist.