IRS Notice CP523 states, "Notice of intent to levy - Intent to terminate your installment agreement - Payment Due Immediately [$amount]".
The IRS uses Notice CP523 to inform you that your installment agreement has defaulted and they intend to levy against your assets. There is also a Notice CP523H, concerning Health Care Tax liability.
The explanation for why the agreement has defaulted may be vague but it is usually because you missed a payment or owe other taxes. It could also be because you have unfiled tax returns or your payment to the IRS bounced. Notice CP523 for Individuals is virtually the same as Letter 2975 sent to Businesses.
This notice is serious because once you default, the IRS will look more closely at you. After thirty days they can immediately seize your wages and property which will be easier for them to find since you likely disclosed the information to them when you originally set up the installment agreement.
Take Action
Quick action will be necessary to avoid levies. The IRS will not send any more letters and won't tell you when they will seize your property.
Usually, you must complete Form 433-A or Form 433F to disclose your income & assets. Please follow our TaxHelp Webinars to learn the tricks & traps of completing these forms!
Options for CP523
You must be wise about your possible options. You could try to re-enter the installment agreement (Letter 3127C) or file bankruptcy, if advisable. Use this Evaluator to see if you qualify for a Bankruptcy. It is usually not recommended to file an IRS Appeal because you can resolve this problem through normal channels of IRS contact. There's no sense in extending the statute of limitations with an Appeal.
But, that is NOT the end of your problem. We must research & explore the various ways to reduce or eliminate your IRS debt. (Blog Post)
If you are successful the IRS will send you confirmation with a Letter 3127C stating your newest debt has been added to the balance & you may continue with your payments.
Each solution has implications to you which must be reviewed prior to action so please follow the Prep Steps for response to IRS Notice CP-523 and see Mr. Hopkins in Colorado Springs or Pueblo before proceeding!
Various IRS Notices CP523:
