If you receive a CP 521 Notice from the IRS (look at the code in the upper right-hand corner), it’s a warning notice. Basically, it says that up to this point, you did everything correctly to resolve your debt with the IRS, but now don’t blow it.
The CP 521 Notice is simply a reminder that you have an installment agreement with the IRS, and your payment is due. The IRS is asking you to send your payment immediately.
What Should You Do?
Simply, it’s time to pay. You can pay online using the payments page on the IRS website to find your payment options in case you haven’t set up automatic payments through a bank account.
But you have other options, and for those, you need to contact your tax professional. Perhaps your financial situation has changed since you set up the installment plan? If so, you might qualify for the Fresh Start Initiative or the Offer In Compromise programs.
What Happens If You Ignore This Notice?
Do not ignore the CP 521 Notice. If you can’t pay, you can call the IRS yourself to discuss your options, but the IRS is unlikely to tell you about the Fresh Start Initiative or the Offer In Compromise. In the meantime, interests and penalties can add up, and you could lose your installment payment program, and that can start the dominos falling with garnishments and seizures.