This little-known option is for taxpayers who have absolutely no resources to pay their tax bill. Naturally, you must be able to prove that you have no assets worth levying and that you have no money at all over your basic expenses. Though this status is definitely not anything to be proud of, you may be able to qualify for this and be relieved of tax burdens.
This is a not a permanent fix. If your situation changes and you suddenly increase your income or have other means to pay, then the IRS will come after you. The currently not collectible status can stop the government from garnishing wages or levying bank accounts. The important issue here is to be able to prove that your wages are not sufficient to pay anything but living expenses. If you have any money left over after payday, then you may not qualify for this program.
A standard rule of thumb is that the IRS cannot seize an asset if you have under 20 percent equity in the item. Also, they will not seize the asset if it would require more money to seize it than the asset is worth. If this is the case, then they may seek another form of tax resolution. In some cases, an account may be deemed uncollectible. This is also subject to change if your financial status changes.
During any period of this type, whether you are making minimal payments or have successfully achieved currently not collectible status, the penalties, interest and fees will continue to mount. There is a 10-year statute of limitation on back taxes and if your status is currently not collectible at the time of the ten years running out, then you no longer owe the back taxes. Be sure to double check with the IRS instead of just assuming that you no longer owe taxes. Its very important to stay on top of your tax liability with regular filings and quick correspondence to IRS notices.
If you would like to explore the option of the currently not collectible status, then it can be greatly helpful to work with seasoned pros. This type of negotiation is delicate and there’s often quite a bit of money at stake. Hiring a professional to help you can ensure that you file the right papers, submit the appropriate supporting documents and get everything done in a timely manner.
IRS laws and statues can be complex and confusing. The Tax Resolvers can assist you in determining if this is the right direction for your case. We examine your finances and your tax liability and help you understand all your choices. This can be valuable for taxpayers. You can calmly discuss your situation with experts and then learn about the government programs available. Please contact The Tax Resolvers and allow us to help you navigate the maze of confusing IRS topics.
Don’t try to fight the IRS alone, our tax professionals can help!