Good afternoon. This happens all the time....you should send the IRS a certified letter and include a copy of the correspondence you received regarding the termination. You should provide them the evidence that the May 10 payment was actually made on May 3, 2011, and demand that the installment agreement be reinstated. This is always better than a call because you have written documentation of what you did. Based on these facts, they will reinstate your agreement.
I hope this has given you the guidance you were seeking. I wish you the best of luck!
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The information given here is not legal advice. As all states have different intricacies in their laws, the information given is general only. This communication does not establish an attorney-client relationship with you. I hope this answer has been helpful to you.