The IRS CP521 notice is an Installment Agreement Termination Notice sent to taxpayers whose payment arrangements with the IRS have been canceled. This notice removes all protections your installment agreement provided and makes your entire tax debt immediately due and payable, subject to aggressive collection actions.

Critical Features of the CP521 Notice:

• Immediate termination of your payment arrangement
• Full balance becomes due immediately
• Collection actions can resume without additional notice
• Reason for termination explained
• Options for reinstatement or alternative arrangements
• 30-day appeal rights for disputing termination
• Warning of collection consequences if no action taken

Payment Default

• Missing monthly payments or making insufficient payments
• Late payments beyond IRS tolerance periods
• Returned checks due to insufficient funds
• Failed electronic payments from bank accounts

New Tax Liabilities

• Filing current year returns with additional taxes owed
• Failing to pay current year tax obligations in full
• Accumulating new debt while on existing payment plan
• Estimated tax payment failures for self-employed taxpayers

Non-Filing Compliance

• Failure to file required current year tax returns
• Late filing of returns even if no tax owed
• Missing information returns (1099s, W-2s, etc.)
• Compliance lapses in business tax filings

Agreement Violations

• Direct debit failures when required for agreement
• Address changes not reported to IRS
• Non-compliance with agreement terms and conditions
• Voluntary termination requests by taxpayer

Loss of Collection Protection

• Federal tax liens can be filed immediately
• Bank account levies can begin without additional notice
• Wage garnishments can start with your next paycheck
• Asset seizure can proceed immediately

Full Balance Due

• Entire remaining debt becomes immediately payable
• Penalties and interest continue to accrue at full rates
• Collection costs may be added to your balance
• No payment plan protection against collection actions

Credit and Financial Impact

• Tax liens filed will devastate your credit score
• Collection actions create additional financial stress
• Emergency financial planning becomes necessary
• Future credit applications will be severely impacted

Immediate Reinstatement
If termination was due to a correctable issue:

Cure the Default:

• Pay all missed payments immediately
• Bring account current including any fees
• Correct compliance issues (file returns, pay current taxes)
• Contact IRS immediately to request reinstatement

New Installment Agreement
Start fresh with a new payment arrangement:

Requirements:

• Current compliance with all filing and payment obligations
• Updated financial information may be required
• Setup fees must be paid again
• Stricter terms may be imposed due to prior default

Alternative Resolution Options

Currently Not Collectible Status
If experiencing financial hardship:

• Temporary suspension of collection activities
• No required payments during hardship period
• Detailed financial disclosure required
• Periodic review for changes in circumstances

Appeal the Termination
If you believe termination was inappropriate:

• 30 days from notice to file appeal
• Collection actions suspended during appeal
• Independent review by IRS Appeals Officer
• Possible reinstatement if appeal is successful

Payment Compliance

• Set up automatic electronic payments when possible
• Make payments early rather than on due date
• Monitor bank accounts to ensure sufficient funds
• Keep detailed records of all payments made

Tax Compliance

• File all returns on time every year
• Pay current year taxes in full when filing
• Make estimated payments if self-employed
• Stay current with business tax obligations

Communication with IRS

• Report address changes immediately
• Respond promptly to IRS correspondence
• Contact IRS proactively if problems arise
• Keep agreement terms readily accessible