INSTALLMENT AGREEMENT DEFAULT CURE REQUEST

Taxpayer Information

[__/__/____]

Internal Revenue Service
[________________________________]
[________________________________]
[________________________________]

Via Certified Mail, Return Receipt Requested

Re: Request to Cure Default and Reinstate Installment Agreement
Taxpayer: [________________________________]
SSN/EIN: [________________________________]
Tax Period(s): [________________________________]
IRS Notice: [________________________________] dated [__/__/____]

To Whom It May Concern:

I write to request reinstatement of my installment agreement and to cure the default identified in the above-referenced notice. This letter is submitted pursuant to Internal Revenue Code ("IRC") § 6159 and the procedures set forth in IRM 5.14.11 for defaulted installment agreements. I respectfully request that the Internal Revenue Service reinstate the agreement under the original or modified terms, as described below.

I. BACKGROUND AND INSTALLMENT AGREEMENT HISTORY

On or about [__/__/____], the Internal Revenue Service and the undersigned taxpayer entered into an installment agreement pursuant to IRC § 6159 for the payment of assessed federal tax liabilities for the tax period(s) identified above. Under the terms of the agreement, I was required to make monthly payments of $[________________] on the [____] day of each month, beginning [__/__/____].

The total outstanding balance at the time the agreement was established was approximately $[________________]. As of the date of default, I had made [____] timely payments totaling approximately $[________________], demonstrating my good faith and commitment to satisfying the liability.

Type of Installment Agreement:

☐ Guaranteed Installment Agreement (IRC § 6159(c)) — Aggregate tax liability ≤ $10,000
☐ Streamlined Installment Agreement (IRM 5.14.5.2) — Aggregate tax liability ≤ $50,000
☐ Non-Streamlined Installment Agreement — Aggregate tax liability > $50,000
☐ Partial Payment Installment Agreement (PPIA) (IRC § 6159(a); IRM 5.14.2)
☐ In-Business Trust Fund Express Installment Agreement (IRM 5.14.5.4)
☐ Direct Debit Installment Agreement (DDIA)

II. REASON FOR DEFAULT

The default on the installment agreement occurred due to the following circumstance(s). I have checked all applicable reasons and provided a detailed explanation below.

A. Reason for Default (Check All That Apply)

☐ Missed payment(s): I missed [____] monthly payment(s) due on [__/__/____], [__/__/____], [__/__/____]
☐ Insufficient payment amount: Payment(s) were made but in an amount less than the required monthly amount
☐ New tax liability assessed: An additional tax assessment was made for tax period(s) [________________________________]
☐ Unfiled tax return(s): A required federal tax return was not filed for tax period(s) [________________________________]
☐ New balance due on a subsequently filed return: A balance was due on a return filed for tax period(s) [________________________________]
☐ Financial information not provided: The IRS requested updated financial information (e.g., Form 433-A, 433-B, or 433-F) that was not timely submitted
☐ Change of address not reported: My address changed and the IRS was not timely notified
☐ Payment method failure: The designated bank account was closed, had insufficient funds, or the direct debit was disrupted
☐ Other: [________________________________]

B. Detailed Explanation of Circumstances

[Provide a thorough, chronological narrative explaining the circumstances that led to the default. Include specific dates, amounts, and any extenuating circumstances. Be factual, honest, and concise. Examples of circumstances that may support reinstatement include:]

• Medical emergency or serious illness affecting the taxpayer or an immediate family member
• Loss of employment or significant reduction in income
• Natural disaster, fire, or other casualty affecting financial resources or access to records
• Death of an immediate family member
• Bank error, processing delay, or electronic payment system failure
• Military deployment or transfer
• Divorce or separation causing financial disruption
• Reliance on a tax professional who failed to make payments or file returns as directed

[________________________________]
[________________________________]
[________________________________]
[________________________________]
[________________________________]

III. CORRECTIVE ACTIONS TAKEN

I have taken the following actions to remedy the default and bring my account into compliance:

A. Payments and Returns

☐ All missed payment(s) have been made in full as of [__/__/____]. Total amount of missed payments remitted: $[________________]
☐ Additional payment of $[________________] submitted to cover the reinstatement fee (see Section V below)
☐ All required federal tax returns have been filed, including:
- ☐ Tax year [____]: Filed on [__/__/____]
- ☐ Tax year [____]: Filed on [__/__/____]
- ☐ Tax year [____]: Filed on [__/__/____]
☐ New tax liability for [tax period] has been addressed by:
- ☐ Payment in full of the new liability: $[________________]
- ☐ Request to include the new liability in the installment agreement (see Section IV below)
☐ Estimated tax payments for the current year have been adjusted to prevent future underpayment:
- ☐ Form 1040-ES payments increased to $[________________] per quarter
- ☐ Form W-4 withholding adjusted with employer on [__/__/____]

B. Compliance Measures

☐ Direct debit (DDIA) enrollment completed or re-established to prevent future missed payments
☐ Bank account updated with the IRS: New bank account routing/account information provided
☐ Address change filed with the IRS (Form 8822 or Form 8822-B)
☐ Power of Attorney (Form 2848) filed for authorized representative to manage the account
☐ Updated financial information (Form 433-A, 433-B, or 433-F) prepared and enclosed (if requested)
☐ Federal tax deposits are current (for business taxpayers)

IV. REQUESTED RESOLUTION

I respectfully request the following resolution:

Option A: Reinstatement Under Original Terms

☐ I request reinstatement of the installment agreement under the original terms: monthly payments of $[________________] on the [____] day of each month. All conditions of the original agreement can be satisfied going forward.

Option B: Reinstatement With Modified Terms

☐ I request reinstatement with modified terms due to a change in my financial circumstances. Specifically, I request:
- Modified monthly payment amount: $[________________]
- Modified payment due date: [____] day of each month
- Inclusion of additional tax period(s): [________________________________]
- Change to direct debit (DDIA): ☐ Yes ☐ No
- Extended payment term: [________________________________]

Basis for modification: [Explain why the modification is necessary and how the proposed terms will allow full satisfaction of the liability within the collection statute expiration date (CSED).]

[________________________________]
[________________________________]
[________________________________]

Option C: Partial Payment Installment Agreement (PPIA)

☐ I request conversion to a Partial Payment Installment Agreement (PPIA) under IRC § 6159(a) because:
- My reasonable collection potential (RCP) is insufficient to pay the full liability within the remaining CSED
- The proposed monthly payment of $[________________] represents my maximum ability to pay based on allowable income and expenses
- I have enclosed a completed Form 433-A (Collection Information Statement for Wage Earners and Self-Employed Individuals) or Form 433-B (Collection Information Statement for Businesses) with full supporting documentation

Note: The IRS must review a PPIA every two years to determine whether the taxpayer's financial condition has changed (IRC § 6159(a); IRM 5.14.2.1).

V. LEGAL BASIS FOR REINSTATEMENT

A. Statutory Authority — IRC § 6159

Under IRC § 6159(a), the Secretary is authorized to enter into written agreements allowing any tax liability to be paid in installments if the Secretary determines that such an agreement will facilitate full or partial collection of the liability. The statute reflects the Congressional intent to provide taxpayers with a reasonable means of satisfying tax obligations.

IRC § 6159(b)(5) provides that the Secretary may modify or terminate an installment agreement if the taxpayer fails to meet the terms of the agreement, fails to provide a financial condition update when requested, or if the Secretary determines that the collection of the tax to which the agreement relates is in jeopardy. However, the statute also provides protections for taxpayers, including the right to notice and the opportunity to cure.

B. IRM 5.14.11 — Defaulted Installment Agreement Reinstatement

Under IRM 5.14.11.1, an installment agreement that is in default status (but not yet terminated) must be reinstated if the taxpayer remedies the condition(s) that caused the default, unless there is another independent basis for default. Specifically:

1. Missed payments: If the taxpayer brings all payments current, the agreement must be reinstated.
2. Unfiled returns: If the taxpayer files all outstanding returns, the agreement must be reinstated.
3. New assessments: If the taxpayer pays the new assessment or the agreement is modified to include it, the agreement must be reinstated.

The IRM further provides that even for agreements that have been terminated, reinstatement may be appropriate if the taxpayer demonstrates:
- The ability and willingness to comply with the terms going forward
- Changed circumstances that make future compliance likely
- Good faith effort to cure the default

C. IRM 5.19.1.6.4.22 — Reinstatement Procedures

The IRS Campus Collection function processes reinstatement requests. Under IRM 5.19.1.6.4.22, the representative must:
- Verify that the default condition has been remedied
- Confirm all required returns have been filed
- Confirm estimated tax payments or withholding are adequate
- Apply the reinstatement/restructuring user fee

D. Taxpayer Bill of Rights — IRC § 7803(a)(3)

The Taxpayer Bill of Rights, codified at IRC § 7803(a)(3), guarantees all taxpayers fundamental rights in their dealings with the IRS, including:
- The right to be informed about what is needed to comply with tax laws
- The right to quality service and to receive prompt, courteous, and professional assistance
- The right to pay no more than the correct amount of tax
- The right to a fair and just tax system that considers facts and circumstances that might affect underlying liabilities
- The right to finality in knowing the maximum amount of time they have to challenge an IRS position and the maximum amount of time the IRS has to audit a particular tax year or collect a tax debt

E. Collection Due Process Rights — IRC § 6330

If the installment agreement is terminated and the IRS proposes to levy, the taxpayer has the right to a Collection Due Process (CDP) hearing under IRC § 6330. At the CDP hearing, the taxpayer may:
- Challenge the underlying liability (if not previously contested)
- Propose collection alternatives, including reinstatement of the installment agreement
- Argue that the proposed collection action is not appropriate under the circumstances
- Raise any relevant issues relating to the unpaid tax

The request for a CDP hearing must be filed within 30 days of the date of the Notice of Intent to Levy (Letter 1058, LT11, or CP504).

F. IRC § 6159(c) — Guaranteed Installment Agreements

If the aggregate amount of the liability (excluding interest, penalties, additions, and additional amounts) does not exceed $10,000, and the taxpayer:
1. Has not had an installment agreement during the preceding 5 tax years,
2. Has filed all required returns and paid all taxes shown thereon for the preceding 5 tax years,
3. The taxpayer has not been able to pay the liability in full and the agreement provides for full payment within 3 years,

then the IRS shall enter into the installment agreement. This is a mandatory provision — the IRS has no discretion to refuse.

G. Revenue Procedure 2016-57 — User Fees

Revenue Procedure 2016-57, as subsequently updated, establishes the user fees for installment agreements:

Note: User fees are subject to periodic revision. Verify current fees at irs.gov or in the most recent revenue procedure.

Low-Income Determination: A taxpayer qualifies for the low-income fee if their adjusted gross income is at or below 250% of the applicable federal poverty level (as determined under IRC § 7811(a)(3)(C); see IRM 5.14.1.4.1.2).

VI. ADDITIONAL ARGUMENTS FOR REINSTATEMENT

Argument 1: Good Payment History

Prior to the default, I maintained a consistent payment history, making [____] consecutive timely payments totaling $[________________]. This demonstrates my good faith intention to satisfy the liability and my ability to comply with the installment agreement terms going forward.

Argument 2: Circumstances Beyond Taxpayer's Control

The default was caused by circumstances beyond my reasonable control, specifically [________________________________]. These circumstances were temporary and have been resolved as described in Section III above.

Argument 3: Reinstatement Facilitates Collection

Reinstatement of the installment agreement is in the best interest of the government because it facilitates the orderly collection of the outstanding liability. Terminating the agreement and pursuing enforced collection (lien, levy, seizure) would be more costly and less productive than allowing continued installment payments. See IRM 5.14.11.2 (considering whether reinstatement "will facilitate collection").

Argument 4: Economic Hardship Considerations

Enforced collection action would cause economic hardship as defined in Treas. Reg. § 301.6343-1(b)(4) because [________________________________]. The installment agreement represents the optimal balance between the government's collection interest and the taxpayer's ability to maintain basic living expenses as determined under IRS Collection Financial Standards.

Argument 5: All Compliance Issues Resolved

As documented in Section III, all compliance deficiencies that contributed to the default have been fully resolved. All required returns have been filed, all withholding and estimated tax obligations have been adjusted to prevent future underpayments, and all missed payments have been remitted.

Argument 6: Lien Is in Place to Protect Government Interest

A Notice of Federal Tax Lien (NFTL) has been filed, protecting the government's interest in the taxpayer's property. The lien provides security for the outstanding balance while the installment agreement remains in effect, reducing any risk to the government from reinstatement.

VII. SUPPORTING DOCUMENTATION CHECKLIST

Please find the following documents enclosed with this request:

☐ Copy of IRS Notice CP523 / CP523H / CP623 or other default notice
☐ Copy of the original installment agreement confirmation letter
☐ Proof of missed payments now made (canceled checks, bank statements, IRS payment confirmation)
☐ Copies of all recently filed tax returns (if unfiled returns caused the default)
☐ Updated Form 433-A (Collection Information Statement for Wage Earners and Self-Employed Individuals) — if financial circumstances changed or modification requested
☐ Updated Form 433-B (Collection Information Statement for Businesses) — if applicable
☐ Updated Form 433-F (Collection Information Statement) — if applicable
☐ Proof of income (recent pay stubs, profit/loss statements, Social Security benefit statements)
☐ Proof of expenses (bank statements, mortgage/rent statements, utility bills)
☐ Medical records or doctor's letter (if illness/medical emergency caused the default)
☐ Employer letter documenting job loss, layoff, or reduced hours (if applicable)
☐ FEMA determination letter or insurance documentation (if natural disaster caused the default)
☐ Death certificate (if death of family member caused the default)
☐ Bank letter explaining processing error (if bank error caused the default)
☐ Proof of adjusted withholding (copy of new Form W-4 or Form 1040-ES voucher)
☐ Form 2848 (Power of Attorney and Declaration of Representative) — if represented
☐ Form 8821 (Tax Information Authorization) — if applicable
☐ Reinstatement/restructuring user fee payment of $[________________]
☐ Other: [________________________________]

VIII. APPEAL RIGHTS

If this request for reinstatement is denied, I understand that I have the following appeal rights:

A. Collection Appeals Program (CAP)

Under IRM 5.14.11.6, a taxpayer may appeal the proposed termination of an installment agreement through the Collection Appeals Program (CAP). The CAP provides an expedited appeal process for collection matters.

B. Collection Due Process Hearing (IRC § 6330)

If the IRS issues a Notice of Intent to Levy following termination, I may request a Collection Due Process (CDP) hearing before the IRS Independent Office of Appeals by filing Form 12153 (Request for a Collection Due Process or Equivalent Hearing) within 30 days of the notice date.

C. Equivalent Hearing

If the 30-day CDP deadline has passed, I may request an Equivalent Hearing within one year of the notice date. An Equivalent Hearing provides the same review but does not preserve the right to petition the Tax Court.

D. Tax Court Petition

If the CDP hearing determination is unfavorable, I may petition the United States Tax Court for review within 30 days of the determination (IRC § 6330(d)).

IX. COLLECTION ALTERNATIVES (IF REINSTATEMENT IS NOT APPROVED)

If reinstatement under any of the options described above is not approved, I respectfully request that the IRS consider the following collection alternatives:

☐ Offer in Compromise (OIC) — IRC § 7122; Form 656: I may qualify for a settlement of the liability for less than the full amount owed based on doubt as to collectibility
☐ Currently Not Collectible (CNC) Status — IRM 5.16: If I cannot afford any monthly payment, I request that my account be placed in CNC hardship status
☐ Temporary Delay in Collection — IRC § 6343(a)(1)(D): I request a temporary delay while my financial circumstances improve
☐ Penalty Abatement — IRC § 6651; IRM 20.1: I request abatement of the failure-to-pay penalty for reasonable cause during the period of financial difficulty
☐ Interest Suspension — IRC § 6404(g): I request suspension of interest for any period during which the IRS failed to provide timely notice

X. PRACTICE TIPS FOR PRACTITIONERS

A. Responding to CP523 Notices

1. Act immediately: The taxpayer has 30 days from the date of the CP523 notice to cure the default before the agreement is terminated. Do not delay.
2. Call the IRS: Contact the number on the notice to discuss reinstatement options. Many defaults can be resolved by phone.
3. Make missed payments first: Before calling or writing, bring all payments current. This strengthens the reinstatement request.
4. File all returns: Ensure all required returns are filed. The IRS will not reinstate an agreement while returns remain unfiled.
5. Use the Online Payment Agreement tool: If eligible, the OPA at irs.gov offers the lowest reinstatement user fee ($10).

B. Preventing Future Defaults

1. Enroll in Direct Debit (DDIA): Automatic payments prevent missed payment defaults and qualify for reduced user fees.
2. Adjust withholding: File a new Form W-4 to ensure adequate withholding to prevent new balance-due returns.
3. Make estimated payments: Self-employed taxpayers should make quarterly estimated payments to avoid new assessments.
4. Monitor the account: Periodically check the IRS account transcript to verify payments are being applied correctly.
5. Report address changes: File Form 8822 or update the address online at irs.gov whenever you move.

C. Partial Payment Installment Agreements (PPIA)

1. A PPIA allows taxpayers to make installment payments that will not fully satisfy the liability before the CSED expires.
2. The IRS must review PPIAs at least every two years (IRC § 6159(a)).
3. PPIAs require full financial disclosure via Form 433-A or 433-B.
4. The IRS will consider the taxpayer's equity in assets and ability to borrow when evaluating a PPIA.
5. A PPIA does not prevent the IRS from filing a Notice of Federal Tax Lien.

D. Key IRS Forms and Publications

XI. DECLARATION

I declare under penalties of perjury that the statements made in this letter are true, correct, and complete to the best of my knowledge and belief. I understand that any false or misleading statement may subject me to additional penalties.

XII. CONCLUSION

For the reasons stated above, I respectfully request that the Internal Revenue Service reinstate my installment agreement [under the original terms / with the modifications described in Section IV]. All conditions that caused the default have been remedied, all required returns have been filed, and I am prepared to fully comply with the terms of the agreement going forward.

Please confirm reinstatement and advise of any additional fees, documentation, or steps required to complete this process. I may be reached at the phone number and address listed above, or through my authorized representative.

Thank you for your consideration and attention to this matter.

Respectfully submitted,

________________________________________
[TAXPAYER NAME]
[________________________________]
[________________________________]
[________________________________]
Telephone: [________________________________]
E-mail: [________________________________]

Authorized Representative (if applicable):

________________________________________
[REPRESENTATIVE NAME]
[TITLE / DESIGNATION (Attorney, CPA, Enrolled Agent)]
[FIRM NAME]
[________________________________]
[________________________________]
Telephone: [________________________________]
E-mail: [________________________________]
CAF Number: [________________________________]

Enclosures

[List all enclosed documents]

1. [________________________________]
2. [________________________________]
3. [________________________________]
4. [________________________________]
5. [________________________________]

Mailing Instructions

Send to the address on the IRS notice via Certified Mail, Return Receipt Requested.

If the notice does not provide an address, or for general installment agreement correspondence:

Internal Revenue Service
Attn: Installment Agreement Unit
P.O. Box [________________________________]
[City, State ZIP from Notice]

Alternative: If the taxpayer has an assigned Revenue Officer, send a copy directly to the Revenue Officer at their local IRS office.

Online: If eligible, use the IRS Online Payment Agreement tool at https://www.irs.gov/payments/online-payment-agreement-application

Sources and References

• IRC § 6159 — Installment Agreements: https://www.law.cornell.edu/uscode/text/26/6159
• IRM 5.14.11 — Defaulted Installment Agreements: https://www.irs.gov/irm/part5/irm_05-014-011
• IRM 5.14.1 — Securing Installment Agreements: https://www.irs.gov/irm/part5/irm_05-014-001
• IRS CP523 Notice Explanation: https://www.irs.gov/individuals/understanding-your-cp523-notice
• Form 9465 Instructions: https://www.irs.gov/instructions/i9465
• IRS Payment Plans Overview: https://www.irs.gov/payments/payment-plans-installment-agreements
• IRS Online Payment Agreement: https://www.irs.gov/payments/online-payment-agreement-application
• Publication 594 — The IRS Collection Process: https://www.irs.gov/pub/irs-pdf/p594.pdf
• Taxpayer Bill of Rights: https://www.irs.gov/taxpayer-bill-of-rights