Balance due & the collection ladder

CP523 notice — serious

Your installment agreement is in default — a missed payment, a new unpaid balance, or a missing return — and the IRS intends to terminate the plan and resume collection, including levy.

Serious

What this letter is

Your installment agreement is in default — a missed payment, a new unpaid balance, or a missing return — and the IRS intends to terminate the plan and resume collection, including levy.

Why you got it: Something the agreement required didn't happen — most often a missed or short payment, or a new tax balance you didn't pay in full.

What it is not

Not termination itself. It is the last notice before termination, and it comes with a cure window and an appeal right most people never use.

Your first move: Contact the IRS as soon as possible and no later than 30 days from the notice date: make the missed payment, ask about reinstatement, or appeal. Do not assume the plan quietly continues.

Your deadline, counted

Every clock runs from this date — not from the day the letter reached you.

Your options, in the order most people should try them

1. Cure it

Make the missed payment and confirm by phone that the plan stands — get the confirmation in writing.

2. Appeal the termination

If the default itself is wrong (a payment they didn't credit), Appeals is the venue.

3. Renegotiate honestly

If the payment no longer fits your budget, say so now — a modified plan or CNC beats a terminated one.

Your rights on this letter

  • Appeal the termination to the IRS Independent Office of Appeals (the notice explains how).
  • Reinstatement — often possible after curing the default; a fee may apply (published fee schedule).
  • A new agreement or hardship status if your finances changed.

How to respond

Call the number at the top of the notice first — speed matters more than form here — then confirm in writing.

Scam check

If someone demands a fee to 'save your payment plan' by phone, hang up. The IRS's number is on the notice itself.

If you ignore it

The agreement terminates, the full balance becomes collectible the hard way — lien or levy — and reinstating later can mean a reinstatement fee and new terms.

Where this sits on the ladder: LT11 →

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Sources, checked 2026-10-19: