Big companies are known for getting all sorts of breaks, but when average
people fall behind, they rarely receive help. When you owe back taxes, but
can’t afford to pay them, then you may qualify for a special tax status
known as currently not collectible.
If you’re approved for currently not collectible status, then the IRS must not
only cease its collection efforts but can no longer garnish your wages or
seize your property.
Want to know if you qualify for currently not collectible status? Contact our
firm here for a specific evaluation of your situation.
What is Currently Not Collectible Status?
If the IRS agrees you can’t both pay your back taxes and cover your
reasonable living expenses, it may place your account in Currently Not
Collectible status. It’s based on your current financial situation.
You can request currently not collectible status by submitting the proper
form and proof to the IRS of your income and expenses, as well as whether
you can sell any assets you may have or get a loan.
As you’ll need to be able to document your inability to pay, be sure to gather
copies of all your bills, your most recent paycheck stubs, and statements
detailing other sources of income such as alimony, pensions or
investments. If the IRS determines that your necessary expenses exceed
your income, then it will notify you of your Currently Not Collectable status
WARNING: Don’t try to do this alone. We recommend reaching out to our
tax resolution firm to guide you through your options. Talking to the IRS
directly could be like shooting yourself in the foot. They’ll ask you very
invasive questions that could land you in deeper trouble. Remember, the
IRS is not your friend. Their job is to collect what they believe you owe
them, so it’s best to have a professional in your corner.
Not a Permanent Solution
Keep in mind that currently not collectible status applies only to your back
taxes. You will still have to file tax returns, and you will not be exempted
from paying current and future taxes. You will also continue to accumulate
penalties and interest on your unpaid taxes. After a year or two, the IRS
may review your status, and if you’re able to begin paying your back taxes,
then you must do so. If you’re still not able to pay, then your status will be
Statute of Limitations
The IRS can attempt to collect outstanding taxes for only 10 years from the
date the taxes were assessed against you, usually that’s the date you filed. If
at the end of this 10-year period the IRS hasn’t collected, then the taxes are
no longer owed.
In difficult times, many families have trouble meeting their commitments.
If you’re worried about the IRS garnishing your wages, levying your bank
account or taking your home, then reaching out to our firm and getting a
free, no-obligation, confidential consultation on your tax problem may give
you some peace of mind. If you’re not approved for Currently Not
Collectible status, our firm will explain the many other tax relief options
with you. Contact us now.