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IRS Notice CP523: Your Payment Plan Is About to Terminate

Notice CP523 warns that your IRS installment agreement is about to be terminated due to default. Common default reasons: missed payments, new tax debt for a subsequent year, failure to file a current-year return, or failure to respond to an

By David Whitaker·3 min read·Updated April 23, 2026
High Urgency
Notice CP523 warns that your IRS installment agreement is about to be terminated due to default. Common default reasons: missed payments, new tax debt for a subsequent year, failure to file a current-year return, or failure to respond to an IRS request for updated financial information. CP523 gives you a specific window — typically 30 days — to cure the default before the agreement is formally terminated and collection resumes.

How to cure the default

To cure the default, you must address whatever caused it: if missed payments, make them up; if new tax debt, pay or arrange to pay it; if unfiled return, file it immediately; if missing financial statement, submit it. Contact the IRS at the number on the notice to confirm your cure and prevent termination. Many defaults can be cured by phone within a single call.

If you cannot cure the default

If you cannot make up missed payments or resolve the underlying issue, do not simply ignore CP523. Options include: negotiating a new installment agreement with a lower monthly amount; requesting Currently Not Collectible status if your financial situation has genuinely changed; applying for an Offer in Compromise. The worst outcome is termination of the agreement without an alternative in place — collection on the full remaining balance resumes immediately.

Consequences of agreement termination

If your installment agreement is terminated without replacement, the IRS can resume full collection: wage garnishment, bank levies, asset seizure, federal tax lien filing. The agreement's prior partial payments are credited toward the balance, but you lose the protection the agreement provided. Re-negotiating a new agreement after termination is possible but typically requires full financial disclosure again.

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Frequently asked questions

How long do I have to cure a CP523 default?+

Typically 30 days from the notice date. The specific deadline is stated on the notice. Act immediately — the sooner you contact the IRS, the more flexibility you have.

Why did I get CP523 if I made all my payments?+

Common non-payment defaults: new tax debt for the current year, failure to file a return, or missing financial documentation requested by the IRS. Read the notice carefully to identify the specific default reason.

Can I renegotiate my installment agreement instead of curing the default?+

Yes. If your financial situation has changed, you can request a modification — lower monthly payment, different payment terms. Communicate with the IRS before the 30-day deadline.

What happens if I ignore CP523?+

Your installment agreement terminates at the end of the cure period. The IRS can resume full collection including wage garnishment, bank levy, and asset seizure. The remaining balance becomes due immediately.

About the author

D

David Whitaker

Tax Resolution Specialist · Fresh Start Division Editorial

David Whitaker covers IRS tax resolution for Fresh Start Division. His reporting focuses on installment agreements, Collection Due Process, Revenue Officer cases, and the procedural requirements taxpayers face when resolving federal tax debt.

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