IRS Letter 2603C: Agreement Accepted
Good news — the IRS accepted your installment agreement. But this is a contract with conditions. Miss a payment, file a return late, or accrue a new balance, and the IRS can terminate the agreement and resume collection. Here's what you need to know to stay compliant.
Your Installment Agreement — Key Terms
Letter 2603C confirms the IRS accepted your proposed installment agreement. Review the letter carefully — it contains the specific terms of your agreement:
Monthly payment amount and due date — mark this on your calendar. Late payments can trigger default.
Total balance covered by the agreement — including tax, penalties, and interest as of the agreement date.
Requirement to file all future tax returns on time — even a single late-filed return can terminate the agreement.
Requirement to pay all future taxes in full — if you owe on next year's return and cannot pay, the agreement defaults.
User fee — typically $31-$225 depending on the payment method (direct debit is cheaper than check/money order).
Collection Statute Expiration Date (CSED) — the date the IRS's right to collect expires (typically 10 years from assessment).
What Can Cause Your Agreement to Default
Missing a monthly payment (even one)
Filing a return late for any future year
Accruing a new tax balance you can't pay
Failing to pay estimated taxes (if self-employed)
Providing inaccurate financial information on the application
Significant increase in income not reported to the IRS