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Currently Not Collectible Status

Each year several million Americans are unable to pay their taxes on time. In addition, even more, owe some type of back taxes to the IRS. It is not a crime if you file your return on time but are unable to pay your taxes when due.

That being said, the IRS can still take collection action to recover unpaid taxes. In many cases, it is possible to come to an agreement with the IRS, such as an installment agreement or lump sum payment (an “Offer-in-Compromise”).

However, what about those taxpayers that simply cannot afford to make installment or lump sum payments? For taxpayers experiencing what the IRS considers to be a financial hardship, it may be possible to receive a tax deferment (known as “Currently Not Collectible Status”). 

Tax Relief Network has assisted taxpayers with receiving tax deferments and also working out long-term solutions with the IRS. Please contact us today for a free consultation.

1. What is Currently Not Collectible Status?

Currently Not Collectible Status (“CNC”) is a designation from the IRS that a tax debt cannot be collected. Often Currently Not Collectible Status is sought when the IRS is actively attempting to collect on a tax debt.

Receiving CNC status will suspend all collection action, giving the taxpayer much needed breathing room. Moreover, it is possible to petition the IRS for refunds of previously levied funds.

Please note that CNC status is not a permanent solution, the taxpayer will still owe the debt.

2. How do I Qualify for Currently Not Collectible Status?

In order to get a tax deferment, you must demonstrate financial hardship to the IRS. As a general matter, the IRS will look to see if you have any assets (such as a savings account) that can be used to pay the debt. If not, the IRS will then determine what your disposable income is to see if you can afford to pay installment payments. Often you will need to complete a financial statement (IRS Form 433). Completing the form can be a complicated process as there are limits on some of the expenses that you can claim.

3. The Taxpayer Roadmap

This illustration of the modern US tax system at a very high level view shows the processes to get answers to your questions from filing to litigation. This illustration provided by the tax payers advocate service shows the complexity of the stages required to get answers to solve your tax issues. If you would like some help navigating through this process we are the experts you need to have on your side! Please contact us at 800-TAX-4200 to speak with one of our team specialist for a no cost or obligation review.

Currently Not Collectible Status

Each year several million Americans are unable to pay their taxes on time. In addition, even more, owe some type of back taxes to the IRS. It is not a crime if you file your return on time but are unable to pay your taxes when due.

That being said, the IRS can still take collection action to recover unpaid taxes. In many cases, it is possible to come to an agreement with the IRS, such as an installment agreement or lump sum payment (an “Offer-in-Compromise”).

However, what about those taxpayers that simply cannot afford to make installment or lump sum payments? For taxpayers experiencing what the IRS considers to be a financial hardship, it may be possible to receive a tax deferment (known as “Currently Not Collectible Status”). 

Tax Relief Network has assisted taxpayers with receiving tax deferments and also working out long-term solutions with the IRS. Please contact us today for a free consultation.

1. What is Currently Not Collectible Status?

Currently Not Collectible Status (“CNC”) is a designation from the IRS that a tax debt cannot be collected. Often Currently Not Collectible Status is sought when the IRS is actively attempting to collect on a tax debt.

Receiving CNC status will suspend all collection action, giving the taxpayer much needed breathing room. Moreover, it is possible to petition the IRS for refunds of previously levied funds.

Please note that CNC status is not a permanent solution, the taxpayer will still owe the debt.

2. How do I Qualify for Currently Not Collectible Status?

In order to get a tax deferment, you must demonstrate financial hardship to the IRS. As a general matter, the IRS will look to see if you have any assets (such as a savings account) that can be used to pay the debt. If not, the IRS will then determine what your disposable income is to see if you can afford to pay installment payments. Often you will need to complete a financial statement (IRS Form 433). Completing the form can be a complicated process as there are limits on some of the expenses that you can claim.

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