Key Takeaways CP523 means the IRS intends to terminate your installment agreement because you have defaulted on the terms Common default reasons include missed payments, unfiled tax returns, and incurring new tax debt You can often reinstate your installment agreement by curing the default and contacting the IRS before termination If the IRS terminates your agreement, you have the right to appeal using the Collection Appeals Program (CAP) If reinstatement is not possible, alternative resolution options such as an Offer in Compromise may be available What Is IRS Notice CP523? IRS Notice CP523 is a notice that the IRS sends when your installment agreement is in default and the IRS intends to terminate it. An installment agreement is a payment plan that allows you to pay your tax debt in monthly installments over time rather than in a single lump sum. When you entered into the installment agreement, you agreed to specific terms and conditions — including making timely monthly payments, filing all required tax returns, and not incurring new tax debt. If you violate any of these terms, the IRS considers you in default and will send a CP523 notice. The CP523 is not immediate termination — it is a notice of intent to terminate. This distinction is important because it gives you a window of opportunity to cure the default, reinstate your agreement, and prevent the IRS from resuming full collection activity against you. However, this window is limited (typically 30 days), and you need to act quickly to take advantage of it. If the IRS does terminate your installment agreement, all of the protections it provided (no levies, no garnishments, no new liens, reduced penalty rate) disappear. The IRS can immediately resume aggressive collection actions, including wage garnishment , bank levies , and federal tax liens ....