CP623i Notice: What Is It and How Should You Respond?

Last updated 10/30/2024 by

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Summary:

If you’ve received an IRS CP623i Notice, it means that your installment agreement is at risk of being terminated due to default. The notice serves as a warning that if no action is taken, the IRS may proceed with seizing (levying) your wages, bank accounts, or other assets to recover unpaid taxes. It’s critical to understand the steps to take to avoid serious financial consequences, including potential loss of assets or revocation of your passport. This article will guide you through understanding the notice, how to respond, and ways to resolve the issue.

Receiving a notice from the IRS can be overwhelming, especially when it involves a potential threat to your financial stability. The CP623i Notice is an alert from the IRS that your installment agreement is in danger of being terminated due to missed payments or non-compliance. If you don’t act promptly, the IRS may take collection actions such as levying your wages or seizing your bank accounts. In this article, we’ll explain everything you need to know about the CP623i Notice, including how to address it and prevent further financial troubles.

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What is the CP623i IRS notice?

The CP623i Notice is issued by the IRS when a taxpayer defaults on an installment agreement. This agreement is a payment plan allowing taxpayers to settle outstanding tax debts over time instead of in one lump sum. Defaulting occurs when you miss a payment or fail to meet other conditions of the agreement. The CP623i informs you that the IRS intends to terminate the agreement unless you take corrective action immediately.

The notice serves as a warning that if the default isn’t resolved, the IRS may take further collection actions, including levying wages, bank accounts, or other assets. The CP623i is not just a reminder but a notification that serious consequences are imminent if no action is taken.

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.

How does the CP623i IRS notice affect you?

When you receive a CP623i Notice, it signifies that your current payment arrangement is in jeopardy. Defaulting on your installment agreement can lead to several negative outcomes, including:

Termination of the installment agreement: The IRS may revoke your payment plan, requiring you to pay the total outstanding balance immediately.
Seizure of assets: If the agreement is terminated, the IRS may proceed to seize (levy) your wages, bank accounts, or other assets to satisfy the tax debt.
Federal tax lien: The IRS may file a lien against your property, which could harm your credit score and make it difficult to obtain loans.
Revocation of a U.S. passport: For taxpayers with seriously delinquent tax debt, the State Department may deny or revoke your passport, limiting your ability to travel internationally.

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Steps to take when you receive a CP623i notice

Here are the immediate steps you should take upon receiving a CP623i Notice:

Read the notice thoroughly: Ensure you understand the reason for the notice and the specific terms of the default. The notice will outline why your installment agreement is at risk of being terminated.
Make the missed payment: If you can, make the payment that led to the default as soon as possible. This could help you avoid termination of your agreement.
Contact the IRS immediately: Use the toll-free number provided on the notice to discuss your options. The IRS may allow you to reinstate the agreement, though a fee may apply, or you may be required to pay any new tax liabilities in full.
Consider setting up a new installment agreement: If the current plan is not feasible, you can request a different payment arrangement. This may involve longer payment terms or smaller monthly payments.

Pro Tip

If you’re struggling to make payments, request a financial review with the IRS. This may qualify you for reduced payment amounts under a partial payment installment agreement.

Reinstating a terminated installment agreement

If your installment agreement has already been terminated, there may still be options to get back on track:

Steps to reinstate your agreement

To reinstate your installment agreement, follow these steps:

1. Contact the IRS: Call the toll-free number on the CP623i Notice to discuss reinstating the agreement. Be prepared to explain why you missed the payment and provide any supporting documentation.
2. Pay the reinstatement fee: You may need to pay a reinstatement fee to resume the installment agreement. This fee can vary depending on your circumstances.
3. Address new tax liabilities: If you incurred new tax debt, you may be required to pay it in full before the IRS allows you to reinstate the original agreement.
4. Submit a new payment proposal: If your financial situation has changed, propose a new payment plan that fits your current budget.

Reinstating a terminated agreement is often possible but may involve additional costs or requirements. It’s better to act quickly before the situation escalates.

Alternative payment arrangements

If reinstating the original agreement is not feasible, consider these alternatives:

Offer in compromise (OIC): The IRS may allow you to settle your tax debt for less than the full amount if you can demonstrate financial hardship.
Partial payment installment agreement (PPIA): This type of agreement allows you to make smaller payments over time, but may result in a longer payment period.
Currently not collectible (CNC) status: If your financial situation is dire, you can request that the IRS temporarily delay collection activities until your circumstances improve.

These options can provide relief if you are unable to maintain the original payment terms, but may have specific eligibility criteria.

What happens if you don’t respond to the CP623i notice?

Ignoring a CP623i Notice can lead to serious financial consequences. If you fail to take action, here’s what could happen:

Levy on wages or bank accounts: The IRS may seize your wages, bank accounts, or other assets to recover the tax debt.
Federal tax lien: A lien could be filed against your property, which can harm your credit and complicate future financial transactions.
Revocation of a U.S. passport: The IRS can certify your tax debt as “seriously delinquent,” which may result in the State Department denying or revoking your passport.
Additional penalties and interest: The longer the debt remains unpaid, the more penalties and interest will accrue.

Pro Tip

Keep records of all communications with the IRS, including dates, representatives spoken to, and any documents sent or received. This can help if you need to appeal or dispute any actions.

Potential outcomes after responding to the CP623i notice

Responding to the CP623i Notice can lead to various outcomes, depending on your actions:

If you make the payment: The installment agreement may be reinstated, and collection actions will be halted.
If you request a new agreement: The IRS may approve a modified payment plan that fits your current financial situation.
If the IRS takes collection action: The IRS may still file a federal tax lien or seize assets, but your proactive efforts could influence a more favorable outcome.
If you qualify for hardship status: The IRS may delay collection activities if you can demonstrate significant financial difficulty.

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Frequently asked questions

What should I do if I can’t afford the missed payment?

If you can’t afford to make the missed payment that led to the default, contact the IRS immediately to discuss your situation. You may be eligible for an alternative payment plan, such as a partial payment installment agreement, which could reduce your monthly payment amount. Additionally, you can explore an Offer in Compromise to settle your tax debt for less than the full amount, or request to be placed in Currently Not Collectible (CNC) status if your financial situation is dire.

Can the IRS levy my assets without warning?

The IRS is required to send you a notice, such as the CP623i, before taking levy actions on your assets. This notice serves as a warning and gives you a chance to resolve the issue before collection actions begin. If you don’t respond to the notice within the specified timeframe, the IRS may proceed with levying your wages, bank accounts, or other assets to recover the unpaid tax debt.

Will a federal tax lien affect my credit score?

Although federal tax liens are no longer directly reported on credit reports, they can still impact your financial situation. A lien can make it difficult to obtain loans or credit, as lenders may view it as a risk. It can also complicate the sale or refinancing of property, as the lien must typically be satisfied before the transaction can proceed. It’s important to resolve any outstanding tax liens as soon as possible to avoid these issues.

How do I qualify for currently not collectible (CNC) status?

To qualify for CNC status, you must demonstrate that paying your tax debt would cause significant financial hardship, making it impossible to meet basic living expenses. You’ll need to provide detailed information about your income, expenses, and assets when applying. If approved, the IRS will temporarily suspend collection activities. However, interest and penalties will continue to accrue on your unpaid tax balance during this time.

What is an Offer in Compromise (OIC), and how do I apply?

An Offer in Compromise (OIC) is a program that allows taxpayers to settle their tax debt for less than the full amount owed if they can demonstrate financial hardship. To apply, you must submit Form 656, “Offer in Compromise,” along with a non-refundable application fee and initial payment. The IRS will evaluate your ability to pay, income, expenses, and asset equity to determine whether to accept your offer. If accepted, you will need to meet all the terms of the agreement and file your future tax returns on time to avoid defaulting on the OIC.

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 CP623i Notice indicates that your IRS installment agreement is at risk of termination due to default.
Ignoring the notice can lead to severe consequences, including asset seizure and passport revocation.
Contact the IRS immediately to discuss reinstating the agreement or setting up a new payment arrangement.
You may qualify for alternative payment options, such as an Offer in Compromise or Currently Not Collectible status.

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