CP560B Notice: What It Means When the IRS Terminates Your Payment Plan

Last updated 11/01/2024 by

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Summary:

The CP560B notice is issued by the IRS to taxpayers when there’s an issue related to an installment agreement for paying off back taxes. This notice typically indicates that the IRS has terminated or rejected the agreement due to non-compliance or missing payments. The CP560B notice includes the reason for termination, what actions you need to take, and the possible consequences if the issue is not addressed. It’s essential to respond quickly to avoid additional penalties or enforcement actions.

Receiving a notice from the IRS can cause immediate concern, especially if it relates to a payment plan for outstanding tax liabilities. One such notice is the CP560B, which informs taxpayers that their installment agreement has been rejected or terminated. This notice is crucial because it outlines the reasons why the payment plan failed and explains the next steps taxpayers should take to either reinstate the agreement or explore other payment options. In this article, we’ll explain what the CP560B notice is, what it means for your tax situation, and how you can resolve the issue to prevent further complications.

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What is the CP560B notice?

The CP560B is a notice from the IRS that informs taxpayers about the termination or rejection of their installment agreement. An installment agreement allows taxpayers to pay off their tax debt over time instead of making a lump-sum payment. However, if a taxpayer fails to meet the conditions of the agreement—such as missing payments or failing to file returns on time—the IRS can terminate the plan and issue a CP560B notice.

This notice outlines the specific reason for the termination, such as missed payments, failure to comply with other tax obligations, or providing incorrect financial information. In some cases, it may also indicate that the IRS has rejected your request for an installment agreement due to non-eligibility or insufficient financial information. Regardless of the reason, receiving a CP560B means you must act fast to avoid further penalties or enforcement actions, such as wage garnishment or bank levies.

How does the CP560B notice affect you?

The CP560B notice indicates that the IRS will no longer accept your installment payments under the terms of your previous agreement. This means that any unpaid tax balance becomes immediately due. Ignoring this notice can lead to serious consequences, including:

– Accumulating penalties and interest: If the installment agreement is terminated, you may start accruing late payment penalties and interest on the unpaid balance.
– IRS enforcement actions: The IRS can take enforcement actions such as garnishing your wages, levying your bank account, or placing a lien on your property.
– Increased financial strain: With the loss of your installment agreement, you may face difficulty paying the full tax balance at once, leading to more financial stress.

Understanding the specifics of your CP560B notice is the first step toward resolving the issue. The notice should provide a detailed explanation of why your agreement was terminated or rejected and what steps you can take to address the situation.

Pro tip

Always keep copies of all IRS correspondence, including the CP560B notice, and your payment records. This will help you quickly provide documentation if needed to reinstate your installment agreement.

Reasons for receiving a CP560B notice

There are several reasons why you might receive a CP560B notice, each with different implications for your financial situation. Common reasons include:

Missed payments

One of the most common reasons for receiving a CP560B notice is missing one or more installment payments. The IRS typically allows a grace period for late payments, but continued non-payment will lead to the termination of your agreement.

Failure to file tax returns

If you have failed to file your tax returns on time while under an installment agreement, the IRS may cancel the agreement. All your tax obligations must be current for the installment plan to remain valid.

Incorrect financial information

Sometimes, installment agreements are terminated because the taxpayer provided inaccurate or incomplete financial information when applying for the agreement. This can happen if the IRS discovers inconsistencies in the information provided.

Failure to meet other conditions

The IRS may set additional conditions for your installment agreement, such as remaining compliant with future tax filings and payments. Failure to meet these conditions can also result in a CP560B notice.

What to do when you receive a CP560B notice

Receiving a CP560B notice can feel overwhelming, but acting quickly can help you resolve the issue and avoid further penalties. Here are the steps you should take:

Read the notice carefully to understand the specific reason your agreement was terminated or rejected.
Check your payment history to ensure that all your payments were made on time and in full.
If the termination was due to missed payments, contact the IRS immediately to see if you can reinstate your agreement or establish a new one.
If your agreement was rejected or terminated due to incorrect financial information, gather the correct documents and resubmit your application.
Consider other payment options, such as an Offer in Compromise or paying in full if reinstating the agreement is not an option.

Pro tip

If you’re struggling to make payments on your installment agreement, consider applying for an Offer in Compromise. It allows eligible taxpayers to settle their tax debt for less than they owe.

Responding to the CP560B notice

Steps to take when responding to a CP560B notice

To resolve the CP560B notice, you must act promptly to avoid additional penalties and interest. The following steps can help you address the issue:

1. Contact the IRS: Call the phone number listed on your CP560B notice to speak with a representative who can explain the reason for the termination or rejection and provide guidance on how to resolve the issue.
2. Submit missed payments: If missed payments are the issue, you may be able to catch up on payments and request reinstatement of your installment agreement.
3. File any outstanding returns: Ensure that all your tax returns are up to date. If you’re missing returns, file them immediately to prevent further penalties.
4. Provide correct financial information: If the rejection was due to incorrect or incomplete financial data, gather the necessary documents and resubmit your application.
5. Consider alternative solutions: If reinstating your agreement is not possible, explore other options like requesting a new installment agreement, paying in full, or submitting an Offer in Compromise.

Alternative solutions for handling a CP560B notice

If reinstating your installment agreement isn’t possible, or if you’re unable to make the necessary payments, you may want to explore other solutions:

– Offer in Compromise: This program allows eligible taxpayers to settle their tax debt for less than the full amount owed if they can demonstrate that paying the full balance would cause financial hardship.
– Temporary Delay: In cases of extreme financial hardship, the IRS may temporarily delay collection efforts, marking your account as “currently not collectible.”
– Partial Payment Installment Agreement: If you can’t afford to pay your tax debt in full, you may qualify for a partial payment installment agreement, which allows you to make smaller payments over a longer period.

Consequences of ignoring a CP560B notice

Failing to respond to a CP560B notice can have serious consequences, including:

Wage garnishment: The IRS may garnish a portion of your wages to collect the unpaid balance.
Bank levies: The IRS can freeze and seize funds from your bank account to satisfy the debt.
Tax liens: The IRS may place a lien on your property, which can affect your ability to sell or refinance real estate.
Accumulation of penalties and interest: Penalties and interest will continue to accrue on your unpaid balance, increasing the amount you owe.

It’s crucial to act quickly and address the issue to avoid these consequences and get back on track with your payments.

Pro tip

Set up automatic payments for your IRS installment agreement to avoid missing payments, which can lead to a CP560B notice and additional penalties.

Potential outcomes after responding to a CP560B notice

Once you respond to a CP560B notice, there are several potential outcomes:

If you resolve the issue promptly: Your installment agreement may be reinstated, allowing you to continue making payments according to the original terms.
If the IRS approves a new agreement: You may enter into a new installment agreement with adjusted payment terms.
If you qualify for an Offer in Compromise: You may be able to settle your tax debt for less than the full amount owed.
If you do not respond: The IRS may take enforcement actions, such as garnishing your wages or placing a lien on your property.

The key to a positive outcome is responding promptly and working with the IRS to resolve the issue.

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Frequently asked questions

Why did I receive a CP560B notice?

You received this notice because the IRS has either terminated or rejected your installment agreement due to missed payments, failure to file tax returns, or providing incorrect financial information.

How can I reinstate my installment agreement?

To reinstate your installment agreement, contact the IRS as soon as possible. You may need to submit missed payments or provide updated financial information.

What happens if I ignore the CP560B notice?

Ignoring the notice can lead to serious consequences, such as wage garnishment, bank levies, or tax liens. Penalties and interest will continue to accumulate on your unpaid tax balance.

Can I resolve the issue online?

In some cases, you may be able to resolve the issue through the IRS’s secure online portal. However, most cases will require contacting the IRS directly and submitting documentation by mail or phone.

Need help understanding other IRS letters and notices? Visit our comprehensive guide to IRS Letters and Notices or search for the document you received in the table below.

IRS Letter or Notice Number

Notice Description

CP01	The IRS verified your claim of identity theft and will monitor your account.
CP01H	The IRS received a tax return with a social security number that belongs to a dead person.
CP02H	Money is due on an amended return based on a grant received due to Hurricane Katrina, Rita, or Wilma.
CP03C	You received the First-Time Homebuyer Credit for a house you purchased.
CP04	You may be eligible for tax deferment because either you or a spouse served in a combat zone, a qualified contingency operation, or a hazardous duty station during the tax year specified on your notice.
CP08	You may be entitled to additional money due to the Additional Child Tax Credit.
CP10	Your tax return changed due to a miscalculation, and the refund you wanted to apply to an estimated tax payment has changed.
CP10A	Your tax return changed due to a miscalculation of the Earned Income Credit, and the refund you wanted to apply to an estimated tax payment has changed.
CP11	You owe money because the IRS amended your return due to a miscalculation.
CP11A	Your tax return changed due to a miscalculation of the Earned Income Credit, and the refund you wanted to apply to an estimated tax payment also changed.
CP11M	Your tax return changed due to a miscalculation of the Making Work Pay and Government Retiree Credit, and the refund you wanted to apply to an estimated tax payment has changed.
CP12	You are due a bigger refund because the IRS corrected one or more mistakes on your tax return.
CP12A	The IRS made changes to correct the Earned Income Credit (EIC) claimed on your tax return.
CP12E or CP12F	The IRS corrected a miscalculation on your return.
CP12M	The IRS made changes to the computation of the Making Work Pay and/or Government Retiree Credits on your return.
CP12R	The IRS made changes to the computation of the Rebate Recovery Credit on your return.
CP13	The IRS made changes to your return due to a miscalculation. There is no refund or amount due. Your balance is zero.
CP13A	The IRS made changes to your return due to a miscalculation of the Earned Income Credit. There is no refund or amount due. Your balance is zero.
CP13M	The IRS made changes to your return due to a miscalculation of the Making Work Pay credit or the Government Retiree Credit. There is no refund or amount due. Your balance is zero.
CP13R	The IRS made changes to your return due to a miscalculation of the Recovery Rebate Credit. There is no refund or amount due. Your balance is zero.
CP14	You owe money on unpaid taxes.
CP16	The IRS made changes to your return due to a miscalculation. The refund you were due was applied to other tax debts.
CP21A	You owe money due to the changes you requested that the IRS make on your tax returns.
CP21B	You are due a refund due to the changes you requested that the IRS make on your tax returns. The money should arrive within 2 to 3 weeks.
CP21C	The IRS made the requested changes to your tax return. You will not receive a refund, and there is no tax due. Your balance is zero.
CP21E	As a result of your recent audit, the IRS made changes to your tax return, and you owe money as a result of those changes.
CP21I	The IRS made changes to your tax return relating to the Individual Retirement Arrangement (IRA) taxes. You owe money due to the changes.
CP22A	The IRS made the changes you requested, and you owe money as a result.
CP22E	As a result of your recent audit, the IRS changed your tax return, and you now owe money.
CP22I	The IRS made changes to your tax return relating to the Individual Retirement Arrangement (IRA) taxes. You owe money due to the changes.
CP23	The IRS changed your return because there was a difference between the amount of estimated tax payments listed on your tax return and the amount actually posted to your account. You owe taxes due to these changes.
CP24	The IRS changed your return because there was a difference between the amount of estimated tax payments listed on your tax return and the amount actually posted to your account. This resulted in an overpayment of estimated taxes.
CP24E	The IRS changed your return because there was a difference between the amount of estimated tax payments listed on your tax return and the amount actually posted to your account. This resulted in an overpayment of estimated taxes.
CP25	The IRS changed your return because there was a difference between the amount of estimated tax payments listed on your tax return and the amount actually posted to your account. You are not due a refund, nor do you owe any money. Your balance is zero.
CP31	You need to update your address because your refund check was returned to the IRS.
CP45	The IRS was unable to apply your overpayment to your estimated tax as you requested.
CP49	The IRS used all or part of your refund to pay a tax debt.
CP53	Your refund check will be sent by mail because the IRS can’t provide your refund through direct deposit.
CP57	The bank declined your payment, so the IRS was unable to draft funds from your bank account.
CP71	A reminder of the amount you owe in tax, penalty, and interest.
CP71A	A reminder of the amount you owe in tax, penalty, and interest.
CP71C	A reminder of the amount you owe in tax, penalty, and interest.
CP71D	A reminder of the amount you owe in tax, penalty, and interest.
CP88	The IRS is holding your refund because you haven't filed one or more tax returns, and it believes you will owe tax.
CP90	The IRS is notifying you of its intent to levy certain assets for unpaid taxes. You have the right to dispute the levy in a Collection Due Process hearing.
CP91	The IRS will levy up to 15% of your social security benefits for unpaid taxes.
CP120	The IRS needs documentation of your tax-exempt status.
CP120A	Your organization’s tax-exempt status has been revoked because it failed to file a Form 990 series return for three consecutive years.
CP130	You may no longer need to pay the Alternative Minimum Tax (AMT) because your tax return filing requirements changed.
CP152	The IRS received your return.
CP153	The IRS will send your refund by mail because your direct deposit did not go through.
CP161	You have an unpaid balance due to the IRS.
CP166	Your monthly payment to the IRS did not go through due to insufficient funds in your bank account.
CP178	You may no longer owe excise tax because your tax return filing requirements changed.
CP231	You need to update your address because your refund was returned to the IRS.
CP259	You did not file the business tax return identified in the notice.
CP259A	You should have filed these forms but did not – Form 990/990-EZ, Return of Organization Exempt From Income Tax, or Form 990-N (e-Postcard).
CP259B	The IRS requires you to file these forms but did not – Form 990-PF, Return of Private Foundation or Section 4947(a)(1) Nonexempt Charitable Trust Treated as a Private Foundation.
CP259C	The IRS believes that you are a private foundation, but did not file the required Form 990-PF, Return of Private Foundation or Section 4947(a)(1) Nonexempt Charitable Trust Treated as a Private Foundation.
CP259D	You must file this form, but you did not – Form 990-T, Exempt Organization Business Income Tax Return.
CP259E	You should have filed this form, but you did not – Form 990-N (e-Postcard) or Form 990/990-EZ, Return of Organization Exempt From Income Tax.
CP259F	The IRS requires you to file this form but did not – Form 5227, Split-Interest Trust Information Return.
CP259G	The IRS requires you to file this form, but you didn’t – Form 1120-POL, U.S. Income Tax Return for Certain Political Organizations.
CP259H	As a tax-exempt political organization, you must file this form, but you did not – Form 990/990-EZ, Return of Organization Exempt From Income Tax.
CP276A	You submitted your tax liability schedule incorrectly. The IRS typically charges a Federal Tax Deposit (FTD) penalty for this but did not this time.
CP276B	The IRS did not receive the correct amount of tax deposits. It normally charges a Federal Tax Deposit (FTD) penalty but did not this time.
CP297	The IRS is notifying you of its intent to levy certain assets for unpaid taxes. You have the right to dispute the levy at a Collection Due Process hearing.
CP297A	The IRS has levied your assets for unpaid taxes. You have the right to dispute the levy at a Collection Due Process hearing.
CP298	The IRS notifying you of its intent to levy up to 15% of your social security benefits for unpaid taxes.
CP501	You have a balance due on one of your tax accounts.
CP503	You have an unpaid balance on one of your accounts, and the IRS has not heard from you.
CP504	You have an unpaid amount due on your account. If you do not pay immediately, the IRS will levy your state income tax refund to apply it to the amount you owe.
CP504B	You have an unpaid amount due on your account. If you do not pay immediately, the IRS will levy certain property or rights to property to apply it to the amount you owe.
CP521	A reminder that you have an installment agreement payment due.
CP523	You have defaulted on your payment agreement. Therefore the IRS is terminating the agreement and will levy your assets.
CP601	Usted tiene un saldo pendiente de pago (dinero que le debe al IRS) en una de sus cuentas contributivas.
CP603	No hemos recibido respuesta de parte de usted y todavía tiene un saldo sin pagar en una de sus cuentas contributivas.
CP604	Usted tiene un saldo sin pagar en su cuenta. De no pagar esta cantidad inmediatemente, el IRS embargará cualquier reembolso de impuestos estatales al que tenga derecho y aplicarlo al pago de su deuda.
CP604B	Usted tiene un saldo sin pagar en su cuenta. De no pagar esta cantidad inmediatemente, el IRS embargará ciertas propiedades o derechos de propiedad y lo aplicará al pago de su deuda.
CP621	Este aviso es para notificarle que usted tiene un plan de pagos a plazos vencido. Por favor, envíe el pago inmediatamente.
CP623	Este aviso es para informarle nuestra intención de cancelar su plan de pagos a plazos y confiscar (embargar) sus bienes. Usted incumplió en su acuerdo.
CP711	Nosotros realizamos cambios a su planilla debido a que entendemos que hubo un cálculo erróneo. Como resultado de estos cambios, usted adeuda dinero por sus contribuciones.
CP721	Hicimos el(los) cambio(s) que usted solicitó a su declaración de impuestos para el año tributario que aparece en su aviso. Como resultado de éste(estos) cambio(s) usted debe dinero en sus impuestos.
CP722	Hicimos el(los) cambio(s) que usted solicitó a su declaración de impuestos para el año tributario que aparece en su aviso. Como resultado de éste(estos) cambio(s) usted debe dinero en sus impuestos.
CP771	Usted recibió este aviso para recordarle sobre la cantidad que adeuda en contribuciones, multas e intereses.
CP772	Usted recibió este aviso para recordarle sobre la cantidad que adeuda en contribuciones, multas e intereses.
CP773	Usted recibió este aviso para recordarle sobre la cantidad que adeuda en contribuciones, multas e intereses.
CP774	Usted recibió este aviso para recordarle sobre la cantidad que adeuda en contribuciones, multas e intereses.
CP959	Usted no radicó su planilla de contribución de negocios identificada en este aviso.
CP2000	The income or payment information on file doesn’t match your tax return. The discrepancy may result in an increase or decrease in your tax due.
CP3219A	The IRS has received information that is different from what you reported on your tax return. This may result in an increase or decrease in your tax.
CP3219N	The IRS didn’t receive your tax return, so it calculated your return based on the information received from employers, financial institutions, and others. If you want to challenge the proposed tax, you have 90 days from the date of this notice. If you are outside the country, you have 150 days.
Letter 0012C	The IRS needs additional information to process your tax return.
Letter 0484C	The IRS wants a completed
Letter 0525	Updates you on proposed changes after an IRS examination. Any changes are explained and details the refund due or taxes owed.
Letter 531	IRS Notice of Deficiency. The information the IRS received about you was different from what you reported on your return.
Letter 0668D(LP 68)	The IRS released their levy.
Letter 0549C	Your tax bill was paid.
Letter 0681C	The IRS accepted your payment proposal. However, this is not a formal Installment Agreement.
Letter 0757C	You did not adhere to the terms of your Installment Agreement.
Letter LT 11	The IRS plans to seize your property or rights to property.
Letter 1058	The IRS has not received your payment. It plans to seize your property or rights to property.
Letter 1615 (LT 18)	You must respond to the IRS within 10 days of this notice regarding past due tax returns.
Letter 1737 (LT 27)	Complete and sign Form 433F, Collection Information Statement.
Letter 1961C	Your application for a Direct Debit Installment Agreement was declined. It explains why and what you need to do to qualify.
Letter 1962C	Your application for a
Letter 2050 (LT 16)	The IRS is trying to collect unpaid taxes from you from returns that have been filed or from returns that have not been filed.
Letter 2257C	The IRS is providing the payoff amount that you requested.
Letter 226-J	An IRS letter to large employers notifying them that they may be liable for an Employer Shared Responsibility Payment (ESRP).
Letter 2271C	A request for an Installment Agreement has been approved. It explains the fees and how to qualify for a Low Income Fee Reduction. The letter may also request missing information.
Letter 2272C	An IRS letter explaining why your request to pay the balance due in installments was declined.
Letter 2273C	A confirmation letter of your request to pay the balance due in installments. It contained the amount to pay, fees charged, and where to send payment. Instructions on how to apply for the Low Income Fee Reduction included.
Letter 2318C	A response to a request to pay taxes due to payroll deductions. It also explains the fees that are charged.
Letter 2357C	The IRS is admitting that it did not send you the balance due notices that it should have.
Letter 2603C	The IRS accepted your installment agreement. The IRS will file a Notice of Federal Tax Lien on your personal property.
Letter 2604C	The IRS has accepted your request for installment payments. This IRS letter provides the monthly payment, the address where to send it, and the fees charged. The letter also provides instructions on how to apply for the Low Income Fee Reduction.
Letter 2761C	The IRS is requesting your combat zone service dates to ensure that it provides you with the special provisions and protection of the combat zone deferment. Copies of military orders or other documentation to support your time served may be requested. Civilians working in support of the Armed Forces may be required to provide a Letter of Authorization or a letter from their employer.
Letter 2789C	An annual reminder notice, as required by law, of the balance due to the IRS. It explains that penalties and interest continue to accrue until the balance is fully paid.
Letter 2840C	Confirms your Installment Agreement request and includes the payment amount and due date. This IRS letter explains the fees charged for paying monthly and explains how to apply for the Low Income Fee Reduction (if you qualify).
Letter 3030C	Provides an explanation of the tax, penalty, and interest still due on your account.
Letter 3127C	A confirmation of your request to make a change to your Installment Agreement. This IRS letter explains the fees for the change. Changes can be to the payment amount or due date, or it can include additional liabilities.
Letter 3174	A reminder of taxes due after the IRS has sent a Notice of Intent to Levy.
Letter 3217C	The IRS has accepted your request to pay the balance in installments. This IRS letter provides your payment amount, the due date, and fees charged. The letter also provides instructions on applying for the Low Income Fee Reduction (if you qualify).
Letter 3228 (LT 39)	A request to pay the balance due within 10 days using the envelope provided.
Letter 3500	The IRS has received your documents, and it needs additional time to review them.
Letter 3572	Your Federal Income Tax Return has been selected for examination. The IRS auditor requests that you call to schedule an audit appointment.
Letter 4883C	The IRS received your federal income tax return but needs more information to verify your identity in order to process your tax return accurately.
Letter 4903 (LT 26)	You must file your tax returns immediately. The IRS has previously contacted you, but it did not receive a response.
Letter LP 47	The IRS is trying to locate the person identified in the letter and is requesting that you provide their new address.
Letter LP 59	The IRS has not received a response to the notice of levy it previously sent.
Audit Letter 2205	The IRS manages audits either by mail or through an in-person interview to review your records. The interview may be at an IRS office (office audit) or the taxpayer’s home, place of business, or accountant’s office (field audit).
Letter 915	You recently underwent an audit, and the IRS informs you that you now owe taxes.

Key takeaways

The CP560B notice informs taxpayers that their IRS installment agreement has been terminated or rejected.
Common reasons for receiving the notice include missed payments, failure to file tax returns, or providing inaccurate financial information.
It’s important to respond quickly to avoid penalties and enforcement actions such as wage garnishment or bank levies.
Alternative payment options include Offers in Compromise, partial payment agreements, or temporary delay in collections.

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