Letter 2274C: Warning of Intent to Terminate Installment Agreement Due to Default

The Letter 2274C is sent by the IRS to notify taxpayers that their installment agreement is at risk of being terminated due to default, typically for missed payments or failure to comply with other terms. This letter provides taxpayers with the opportunity to reinstate the agreement by taking corrective actions.

Key points in Letter 2274C:

• Reason for Default: The letter explains why the installment agreement is in default, such as missed payments, failure to file required tax returns, or the accrual of additional tax liabilities.
• Opportunity to Reinstate: Taxpayers are given the chance to reinstate the installment agreement by addressing the issues that caused the default. This could involve making missed payments, filing overdue returns, or resolving other compliance issues.
• Consequences of Termination: If the taxpayer does not take action to correct the default, the IRS may terminate the installment agreement and proceed with more aggressive collection actions, such as levies or liens.
• Next Steps: The letter outlines the steps taxpayers need to take to reinstate the installment agreement and avoid termination, such as paying the outstanding amount or contacting the IRS to discuss alternative solutions.

Letter 2274C is a final warning for taxpayers to address the default and avoid losing the benefits of their installment agreement, which could lead to more severe collection actions.