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The Options Available to Taxpayers to Solve IRS Problems-Currently Not Collectible Status
By Larry Weinstein, CPA | December 10, 2007
The 4th Installment in the Series-Options Available to Taxpayers to Solve Their IRS Problems
Currently-not-Collectible
Currently-not-Collectible status means the taxpayer does not presently have the ability to pay their tax debts. The IRS uses this status to protect taxpayers from hardships that can be caused by collection activity.
To qualify for Currently-not-Collectible status, your allowable expenses must exceed or come close to exceeding your income. The IRS will also consider your assets before placing your account into Currently-not-Collectible status.
Once your account in placed in Currently-not-Collectible status, the IRS will stop all collection activity including levies and garnishments. The IRS will send you an annual statement stating the amount of tax still owed. Your account will be reviewed periodically to determine if your financial situation has changed and whether you still qualify to be classified as Currently-not-Collectible.
While your account is in Currently-not-Collectible status, the IRS will continue to add interest and penalties but it will not try to collect the taxes from you.
When your account is placed in Currently-not-Collectible status, you must continue to file your returns each year to remain eligible for the status.
Currently-not-Collectible status does not eliminate your tax debt, it only stops collection activity.
Topics: Currently Not Collectible Status |