The CP523 is a letter from the IRS informing you that it will terminate your installment agreement plan and levy your assets due to a defaulted payment.
A defaulted payment may result from failure to pay your monthly installment amount or failure to provide the IRS with requested information, among other things.
When you receive the CP523 notice, it does not mean your installment agreement will instantly be cancelled. Your account will be listed with the IRS as being in default, but this status can be appealed.
The IRS allows you to appeal the decision up to 30 days from the day the notice is sent, which could reinstate your payment plan.
If you ignore a CP523, the IRS can take drastic collection measures like tax liens, levies, and wage garnishments. But you still have a few options, including:
- Negotiating a lower monthly payment
- Applying for an Offer In Compromise (OIC)
- Declaring Chapter 7 bankruptcy
- Claiming financial hardship
Don’t wait to take action. If you are at risk of missing your payments or have received a notice, we recommend getting in touch with a tax professional right away.