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Currently not Collectible | IRS Hardship | Florida

Updated: 3 days ago

FLAT FEE TAX RELIEF


CURRENTLY NOT COLLECTIBLE STATUS


IS IT REALLY POSSIBLE TO OWE THE IRS AND NOT PAY THE TAX DEBT BACK?

Do you owe a tax bill to the IRS but, at this moment, you cannot make payments to the IRS? 

Are you worried the IRS will levy your paycheck or your bank account and leave you with nothing to pay your living expenses?

If you answered yes to either questions above, then you might qualify for what is called Currently Not Collectible Status (#IRShardship). Being declared Currently not Collectible is an agreement whereby you will not have to repay any of your tax debt (at least for the time being). 

You may ask "What is this all about?

You can never expect the IRS to tell you, but the IRS rules require the IRS to end al enforcement collection tactics from you if, after paying your everyday expenses, you don't have the extra money to pay your tax bill.

In IRS speak, the IRS calls this placing you in “Currently Not Collectible Status,” also known internally within the IRS as “Status 53.”  Currently Not Collectible Status is often referred to as “CNC.”

YOU MAY ASK, “IS THEIR A CATCH ?" Being declared Currently not Collectible is not a complete "get out of jail free card." While the IRS will not be enforcing collection, the IRS will continue to add interest and penalties even (the same applies even if the IRS places you on a monthly payment plan).

If the IRS has not already done so and you owe more than $10,000 (typically), the IRS will file a tax lien (i.e. a public notice that you owe the IRS taxes). In IRS lingo, the IRS calls this a “Notice of Federal Tax Lien Filing.” From a practical point, this probably won't be much of a factor as the major credit reporting services no longer report tax liens.

Lastly, the IRS will periodically (every 18 months or so) require you to update your financial information to see if you can afford to start paying. 

Importantly, like other resolutions—after the IRS places you in Currently Not Collectible Status— the IRS will terminate your Currently Not Collectible Status and send your case back to collections if you fail to timely pay or timely file your taxes.

Keep in mind, if you withhold or disclose false material information to the IRS, the US Department of Justice may bring criminal charges against you alleging you committed fraud.

WHAT IS THE BENEFIT TO YOU SHOULD THE IRS PLACES YOUR TAX DEBT IN CURRENTLY NOT COLLECTIBLE STATUS? The most important benefit (and most obvious) is that you rest easy knowing the IRS will refrain from collecting from you.  You will not have to worry about IRS bank levies, wage levies, and other collection actions so long as you remain in CNC.

Further, should the Collection Statute of Limitations (i.e. generally, 10 years from the date the IRS assessed the tax liability) run out, the IRS cannot collect (the IRS writes off the tax debt for the specific taxes where the collection statute of limitations expired). Please do not try to run out the "IRS clock" on your own. Note, certain actions pause the collection statute of limitations clock such as filling certain types of appeals, filing for bankruptcy protection or submitting an Offer in Compromise.

OFFER IN COMPROMISE


If the IRS placed you in Currently Not Collectible Status, you may want to look into a different tax relief program to try to settle your tax debt for possibly pennies on the dollar. The IRS has a settlement program called an “Offer in Compromise.” If you want further information about an Offer in Compromise, check out our website at Flat Fee Tax Relief.

IRS collection agents are trained to try to collect from you as much as they can as fast as they can. You should expect the IRS agents to keep mum about placing you in CNC or any other rules that benefit you. Should the IRS tell you about the Offer in Compromise program, they will not assist you in completing it. In other words, "you are on your own."

Even if you request the IRS collection representatives to place you in Currently Not Collectible Status, you have to know what expenses the IRS allows, what proof you need to submit, and so on.

If you have a serious tax liability, it would be wise to hire the best to help you resolve your case. 

On a brighter note, it is possible to find an experienced tax professional that will make the process easy and, more often than not, provide you with a much better result than you could have procured on your own.  Your best bet is to find the right type of tax professional for your particular situation, and to do your homework to make sure they are reputable.

With the vast majority of tax liabilities that wind up in collections, the accounting/number-crunching phase has already taken place. The work that remains includes protecting you from enforcement (wage garnishment, bank levies), defending your rights, and advocating on your behalf.  Strong written and verbal persuasion skills coupled with a firm grasp of the tax laws are what most often win the day.  Consequently, you may be better off choosing an attorney with experience handling tax collection cases than you would be with an accountant. This article is written by the tax professionals at Flat Fee Tax Relief who have been providing valuable IRS tax debt help at a very affordable fee for more than a decade.


Our teams are strategically located in Clearwater, Florida, and San Diego, California. This allows our tax pros to be available from coast to coast from 8 A.M. Eastern to 6 P.M. Pacific time. This comes in handy when having an IRS levy stopped in one day.

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