What Is IRS Notice CP523?
IRS Notice CP523 is sent when the IRS determines that you have defaulted on an existing installment agreement. This notice warns that the IRS plans to terminate your payment plan and may resume collection actions if the issue is not resolved.
CP523 signals that a previously negotiated agreement is at risk.
What Does a CP523 Notice Mean?
A CP523 notice means the IRS believes you have failed to comply with the terms of your installment agreement. Common reasons include missed payments or new unpaid tax obligations.
Once an installment agreement is terminated, the IRS regains the ability to pursue enforced collection.
Why Did You Receive a CP523 Notice?
You may receive a CP523 notice if:
- You missed one or more installment payments
- A payment was returned or rejected
- You incurred a new tax balance while on a payment plan
- Required tax returns were not filed while the agreement was active
Even a single missed payment can trigger this notice.
Is CP523 a Final IRS Notice?
CP523 is not a levy notice by itself, but it is a pre-termination warning. If the installment agreement is terminated and the balance remains unpaid, the IRS may proceed with:
- Levy notices (such as CP504 or LT11 / CP90)
- Wage garnishment or bank levies
- Filing or enforcing a federal tax lien
What Is the Deadline to Respond to a CP523 Notice?
CP523 typically provides a short response window, often 30 days or less, to correct the default.
Acting quickly may allow you to:
- Reinstate the installment agreement
- Modify payment terms
- Prevent termination and enforcement
The exact deadline appears on the notice.
What Happens If You Ignore a CP523 Notice?
If a CP523 notice is ignored:
- Your installment agreement may be terminated
- The full balance becomes immediately collectible
- The IRS may resume enforcement actions
- Penalties and interest continue to accrue
Once terminated, reinstating an agreement can be more difficult.
What Are Your Options After Receiving a CP523?
Common response options include:
- Paying missed amounts to reinstate the agreement
- Requesting a modification to payment terms
- Setting up a new installment agreement
- Exploring alternative resolution options if payment is no longer feasible
Prompt response can often prevent escalation.
Which IRS Forms Are Related to a CP523 Notice?
Forms commonly associated with CP523 include:
- Form 9465 – Installment Agreement Request
- Form 433-F – Financial Information Statement
- Form 433-A / 433-B – Detailed financial disclosures (if required)
What IRS Notices Are Related to CP523?
Notices commonly related to CP523 include:
- CP14 – Initial balance due notice
- CP501 / CP503 – Balance due reminders
- CP504 – Notice of Intent to Levy (state refund)
- LT11 / CP90 – Final Notice of Intent to Levy
CP523 often appears between reminder notices and levy notices.
When Should You Seek Help With a CP523 Notice?
You may need assistance if:
- You can no longer afford the current payment plan
- Multiple tax years are involved
- Enforcement action is imminent
- You want to preserve or renegotiate your agreement
Summary
IRS Notice CP523 warns that your installment agreement is in default and may be terminated. Responding quickly can help reinstate or modify the agreement and prevent the IRS from resuming collection actions.
Scope Note
This page explains IRS Notice CP523 and general response options. It does not provide legal or tax advice.