I'm Anne. I've been preparing taxes for 27 years and I'll be happy to help you.
First the above expert was correct in that it is not illegal to close out the account, as long as the IRS does not have a lien against it, but regardless of whether you do that or not, you definitely need to contact the IRS and try to resolve this matter.
The CP 526 letter states that you defaulted on an installment agreement that you had in place with the IRS. Did you in fact have an installment agreement with the IRS that you defaulted on? Please see below:
The LT16 letter is issued when you do not contact the IRS re: taxes due, and is warning you that they may go to the next level by leveling your wages, bank accounts, and other forms of income.
The LAST thing you want to do is to NOT contact the IRS as it can look upon your silence unfavorably. If nothing else, it can delay any more action from the IRS. Please see below:
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