Tax Relief AnswersIRS Notice CP523: Payment Plan About to Be Terminated
The short answer
CP523 means your installment agreement has defaulted and the IRS intends to terminate it and levy your assets. The IRS page says to contact it "as soon as possible but no later than 30 days from the date of the notice," and that you may be able to reinstate the agreement, possibly for a fee. If you do not respond, the IRS terminates the plan and begins collection, which it says "can include filing a federal tax lien or seizing (levying) your wages and/or bank accounts." Source: IRS, Understanding your CP523 notice, reviewed October 2, 2026.
What the notice means
| Item | What the IRS page says |
|---|---|
| Why you got it | "You have defaulted on your agreement"; the notice itself states the reason |
| Deadline | Contact the IRS no later than 30 days from the date of the notice, before the termination date it shows |
| If you do nothing | The agreement is terminated and collection begins: a federal tax lien, or a levy on wages or bank accounts |
| Fixing it | Call right away to see if you can reinstate; you may have to pay a fee or pay any new tax liability in full |
| Appeal | You have the right to file an appeal and request a hearing with the IRS Independent Office of Appeals |
| Passport | The notice also explains passport denial or revocation for seriously delinquent tax debt |
The IRS payment plan page lists the fee to revise a plan at $6 online or $89 by phone, mail or in person, as of October 2026, with no fee for changes to a direct debit plan (IRS, Payment plans). The CP523 page says a reinstatement fee may apply; ask for the exact amount on the call.
What to do
- Read the reason on the notice and the termination date.
- If you missed a payment, make it now and call the number on the notice to ask for reinstatement. Do this within 30 days of the notice date.
- If a new balance caused the default, ask whether the new year can be added to the plan or must be paid in full; the IRS page mentions both outcomes.
- If your income has dropped, ask for a lower payment or for Currently Not Collectible status instead of reinstating a plan you cannot keep.
- If you believe the default is an error (a payment was made and not credited), send proof and ask for the appeal with the Independent Office of Appeals that the notice allows.
- When the plan is reinstated, ask for direct debit so a missed payment does not happen again; the direct debit fees are lower on the IRS payment plan page.
What this notice does not mean
- It does not mean the plan is already terminated. The notice announces an intent to terminate and gives a date.
- It does not by itself start the 30-day Collection Due Process window for a levy. That right comes from the final levy notice (LT11 or Letter 1058, CP90 or CP297) if you have not already received one. CP523 carries an appeal right with the Independent Office of Appeals.
- It does not mean you must pay the whole balance. Reinstatement, a revised plan or hardship status are all possible outcomes of the call.
- It does not mean the IRS has already filed a lien or levied anything; the page describes those as what can follow termination.
Reinstating a plan is one call to the number on the notice. If you are offered paid help for a CP523, ask what the company would do beyond that call.
FAQ
How long do I have after a CP523?
The IRS page says to contact it no later than 30 days from the date of the notice.
Can I get my payment plan back?
The IRS page says to call right away to see if you can reinstate it; a fee may apply, and a new balance may have to be paid in full.
What happens if the plan terminates?
Collection resumes, which the IRS page says can include a federal tax lien or a levy on wages or bank accounts.
Can I appeal a CP523?
Yes. The IRS page says you have the right to file an appeal and request a hearing with the IRS Independent Office of Appeals.