What happens if I miss a payment on my IRS installment agreement?

Missing a payment on your IRS installment agreement can trigger default, but the IRS typically provides a grace period. After a missed payment, the IRS sends a CP523 notice (Intent to Terminate Your Installment Agreement) giving you 30 days to catch up. If you bring the payment current within 30 days, your agreement continues. If you don't cure the default, the IRS will: terminate the installment agreement, reinstate full collection activity (levies, garnishments, liens), charge a reinstatement fee to restart the agreement, and lose any reduced penalty rate you were receiving. To prevent this: set up Direct Debit (auto-pay) to avoid missed payments, contact the IRS before missing a payment if you're having financial difficulty, request a payment modification if your situation has changed, and keep making whatever partial payments you can even if you can't make the full amount. If your agreement is terminated, you can request reinstatement by calling the IRS, curing the default, and paying any outstanding balance. You can also negotiate a new agreement with different terms. If your financial situation has permanently changed, consider other options like an Offer in Compromise or Currently Not Collectible status.