What Happens if You Ignore A CP623B Notice From The IRS?
Summary:
The CP623B IRS Notice informs taxpayers of the intent to terminate their installment agreement due to default, potentially leading to asset seizure or wage levies. If you receive this notice, it indicates that you have failed to meet the terms of your payment agreement. It is crucial to respond quickly by making the necessary payment or contacting the IRS to discuss reinstating the agreement and avoiding collection actions.
Receiving a CP623B notice from the IRS can be a stressful experience. This notice indicates that you have defaulted on an existing installment agreement, and the IRS is warning you of the potential termination of the agreement. It serves as an official alert that further action, including seizing assets or levying wages, may occur if you do not address the issue. To avoid severe consequences, it’s important to understand what the CP623B notice means, how it impacts you, and what steps you should take next.
Get Competing Personal Loan Offers In Minutes
Compare rates from multiple vetted lenders. Discover your lowest eligible rate.
It's quick, free and won’t hurt your credit score
What is the CP623B notice?
The IRS sends a CP623B notice when a taxpayer is at risk of losing their installment agreement due to non-compliance with the agreed-upon payment terms. This notice signifies that you have defaulted, meaning you’ve either missed payments or failed to meet other conditions of the agreement. The IRS is legally required to notify taxpayers before terminating an installment plan or taking enforcement actions such as levying wages or seizing assets. The notice outlines the amount owed, reasons for default, and the deadline for taking corrective action to avoid further consequences.
Pro Tip
Set up IRS account alerts online to get real-time notifications on any changes to your tax return or account. This helps you stay updated on adjustments and due dates.
Reasons why you may have received a CP623B notice
Several circumstances can trigger the issuance of a CP623B notice:
- Missed installment payments: If you missed one or more payments on your installment plan, the IRS considers the agreement to be in default.
- New tax liabilities: Accruing additional tax debts while on an installment agreement may lead to default.
- Failure to file required tax returns: The IRS requires that all necessary tax returns be filed on time. If you fail to comply, your agreement could be terminated.
- Insufficient payments: Paying less than the agreed-upon amount may also cause the default of your installment agreement.
Struggling with IRS notices? If you’ve received an IRS letter and aren’t sure how to handle it, you might want to explore professional tax relief options. Optima Tax Relief has helped thousands of people resolve their tax issues and get back on track with the IRS. Learn more about how they can assist you with your situation.
How the CP623B notice affects you
The CP623B notice serves as a warning that your installment agreement is in jeopardy, and it signals potential serious consequences:
- Risk of asset seizure: If the agreement is terminated, the IRS can levy your wages, bank accounts, or other assets to collect the debt.
- Tax liens: A federal tax lien may be filed against your property, which could affect your credit score and ability to secure loans.
- Passport restrictions: If you owe a significant amount, your passport may be affected under the FAST Act, which can prevent the issuance or renewal of your passport due to “seriously delinquent tax debt.”
- Loss of payment plan privileges: Defaulting could make it more difficult to secure future installment agreements or negotiate favorable terms.
Pro Tip
Consider setting up a direct debit payment plan to avoid missing payments. Automatic withdrawals ensure you stay current with your installment agreement and reduce the risk of default.
Steps to take when you receive a CP623B notice
To avoid losing your installment agreement, act immediately upon receiving the notice. Here’s what you should do:
- Read the notice carefully: Understand the reason for the default and any deadlines mentioned in the notice.
- Make the necessary payment: If possible, bring your account current by making the overdue payment before the termination date.
- Contact the IRS: Call the toll-free number on the notice to discuss reinstating your agreement. The IRS may require you to pay a fee or the full balance of any new tax liabilities.
- Consider other payment options: If you cannot pay the balance, ask about alternative solutions like adjusting the payment plan or submitting an Offer in Compromise.
- Keep records of all communications: Document any discussions with the IRS and keep copies of payments made.
Taking these steps will help prevent more severe enforcement actions and allow you to maintain or reinstate your installment plan.
How to reinstate a terminated installment agreement
Steps to reinstate your agreement
Reinstating your agreement after receiving a CP623B notice is possible, but may involve certain fees and conditions:
- Contact the IRS immediately: Call the number provided on the notice to speak with a representative about your situation.
- Pay any applicable reinstatement fees: There is usually a fee associated with reinstating an installment agreement, though it may be reduced for lower-income taxpayers.
- Address any new tax liabilities: If you accrued additional tax debt, you may need to pay it in full to qualify for reinstatement.
- Provide updated financial information: The IRS may request updated income and expense details to determine whether you still qualify for the installment plan.
Reinstating your installment agreement can help you avoid more severe collection actions, such as asset levies.
Alternatives if you cannot reinstate your agreement
If reinstating your agreement is not feasible, consider these alternative options:
- Offer in compromise: This allows you to settle your tax debt for less than the full amount, but qualifying can be challenging.
- Partial payment installment agreement: If you cannot afford full payments, this option allows for smaller, more manageable payments.
- Currently not collectible (CNC) status: If you are experiencing significant financial hardship, the IRS may temporarily halt collection activities.
Pro Tip
If you’re struggling to make payments, consult a tax professional before contacting the IRS. They can help you explore options like an offer in compromise or adjusting the payment plan.
Potential consequences of not responding to a CP623B notice
Failing to address a CP623B notice can result in severe consequences, including:
- Asset seizures: The IRS can levy bank accounts, wages, or other property to satisfy the tax debt.
- Federal tax lien: A lien may be filed against your property, which can damage your credit rating.
- Increased penalties and interest: Additional charges will accrue on the unpaid balance, increasing your total debt.
- Legal actions: In extreme cases, the IRS can pursue further legal measures to collect the debt.
Ignoring the notice will only worsen the situation, so act promptly to avoid these outcomes.
What to do if you disagree with the notice
If you believe the CP623B notice was issued in error or you have already taken corrective action, you have the right to dispute it:
- Contact the IRS: Call the number listed on the notice and explain your situation. Have documentation ready to support your case.
- File an appeal: If you still disagree after speaking with a representative, you can request a hearing with the IRS Independent Office of Appeals.
- Seek professional advice: A tax attorney or CPA can help you prepare your appeal and navigate the IRS dispute process.
Resolving disagreements quickly can help prevent termination of your installment agreement.
Looking for the best way to reduce your tax burden? We’ve compiled a list of the Best Tax Relief Companies to help you navigate tax challenges and save money. Click here to discover trusted experts who can assist you with tax resolution, IRS negotiations, and more!
Frequently asked questions
What happens if I cannot pay the full amount by the deadline?
If you cannot pay the full amount by the deadline mentioned in the CP623B notice, you should still contact the IRS to discuss your options. The IRS may allow you to adjust the payment terms, negotiate a new installment agreement, or explore alternative payment options, such as a partial payment installment agreement. Ignoring the notice and failing to communicate with the IRS can lead to asset seizures, wage levies, or other serious consequences.
Can I apply for an offer in compromise after receiving a CP623B notice?
Yes, you can apply for an offer in compromise (OIC) after receiving a CP623B notice. An OIC allows you to settle your tax debt for less than the full amount owed if you qualify. The IRS will evaluate your income, expenses, and assets to determine whether accepting a reduced amount is reasonable. This process can be complex, so it may be beneficial to seek assistance from a tax professional.
How can I avoid defaulting on an installment agreement in the future?
To avoid defaulting on an installment agreement in the future, make sure to pay the agreed-upon amount on time each month. It’s also important to file all required tax returns by their due dates and avoid accruing additional tax debts. Setting up automatic payments through your bank or the IRS’s online payment system can help ensure timely payments. Additionally, if your financial situation changes, contact the IRS promptly to discuss adjusting your payment terms.
Will the IRS notify me before taking enforcement action like a levy?
Yes, the IRS is legally required to notify you before taking enforcement actions such as a wage or bank levy. The CP623B notice serves as the initial warning that your installment agreement is at risk of termination. If you do not respond to the notice or resolve the issue, the IRS may send additional notices indicating that a levy or other collection action is imminent. It’s crucial to act promptly to prevent these actions.
Can I still travel internationally if I owe back taxes after receiving a CP623B notice?
If your tax debt is considered “seriously delinquent” (typically $59,000 or more, including penalties and interest), the IRS may certify your debt to the State Department under the FAST Act. This can result in the denial of passport issuance or renewal. While the CP623B notice itself does not automatically impact your travel ability, failing to resolve your tax debt could eventually lead to passport restrictions. It’s best to address the notice promptly to avoid any potential travel issues.
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.
| 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 CP623B notice alerts taxpayers of a default on their installment agreement and potential termination.
- Ignoring the notice can lead to asset seizures, wage levies, or tax liens.
- Responding promptly by making the necessary payment or contacting the IRS can help avoid severe collection actions.
- Options for resolving the issue include reinstating the agreement, negotiating a new plan, or pursuing alternative solutions like an offer in compromise.
Share this post:
Table of Contents