Means that a taxpayer has no ability to pay his or her tax debts. The IRS can declare a taxpayer “currently not collectible,” after the IRS receives evidence that a taxpayer has no ability to pay. However be aware, the IRS will continue to monitor the taxpayer’s situation and can remove you from the Currently Not Collectible status if they see your financial situation changes and once again begin collection efforts.This can take the form of wage garnishments, liens, levy’s, etc.
Do you suffer from hardships that make it financially difficult or impossible to pay your tax debts? Will paying your tax debts mean that you will not be able to cover your basic needs in life? Perhaps the IRS is trying to achieve past tax debts from your business and there are no assets available to repay the debt?
Should conditions apply to Individuals or your businesses they may be able to get Currently Not Collectiblestatus (CNC).
The vast majority of individuals seeking CNC status do so because they suffer from a physical or economic hardship. In many cases, these two causal factors can be inter-related. One of the conditions required to meet this particular IRS classification is a serious medical problem. If you presently suffer from a terminal illness you may qualify.
As well, if you suffer from a non-terminal, serious health problem that requires extensive, costly and ongoing medical treatment you may qualify. The IRS Revenue Officer will review your financial situation and make that determination.
Under certain circumstances, some businesses may be able to qualify for CNC status. In most cases, this status is reserved for limited liability companies and limited partnerships. Qualifying for this status depends on whether or not the LLC or partnership is in operation, whether the LLC or the partnership has any assets available or if the corporation has zero revenues available to be levied.
In order to receive Currently not Collectible (CNC) status from the IRS you must prove that you do not have any assets that would enable you to pay the back tax debt you owe. You must prove that you have enough money to pay for the very basic necessities of life and nothing else. The necessities of life would include: rent, mortgage, food and clothing, health insurance, car payments, auto maintenance, court ordered payments (child support, etc), secured loans, utilities, etc. These are called allowable expenses.
In order to provide the IRS with all the pertinent information/documentation it requires to stop debt collection activities against you, you will need to have kept accurate records and documentation of virtually every financial aspect of your life for a long period of time. Save all receipts, invoices, and statements that illustrate your financial situation. You never know when you may be asked for additional proof of income or expenses.
Should the IRS consider you “currently not collectible”, CNC status will usually be for a period of 18 to 24 months. At the end of the Currently Uncollectible period, you, the taxpayer, will need to show the IRS that your economic situation has not changed. As long as you enjoy that status with the IRS, you will not be expected to pay any of the IRS tax debt.
Whether you are presently in the Currently not Collectible status or think you should be, you need to speak to one of our professionals.
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