Currently Not Collectible
This is a much needed program offered by the IRS. This is for taxpayers experiencing severe economic hardships. We may be able to qualify you for this program if you are facing a situation where you do not have any disposable income. We may even be able to get you protected on this program, even if you have already received a bank levy notice. Furthermore, we may be able to get your wage garnishment stopped. Actually, with the currently not collectible program, we are often able to stop all collections. Call and speak to one of our tax consultants, and ask them if you qualify for this program. They will discuss the entire process with you, and can often accomplish the process for you the same day.
What are the Program Qualifications?
In order to see if you qualify for the this program, we offer a free consultation. Basically, you have to demonstrate that you cannot currently afford to pay anything. First, the IRS calculates your current net income. This is done by deducting any required tax and insurance deductions from your gross pay. Next, the IRS takes a look at all of your current expenses. This can get a bit tricky. This is because the IRS has maximum expense standards for everything. These standards are adjusted based on how many dependents you claim. They are also adjusted by the county that you live in. Finally, the numbers must show that there is no disposable cash flow. This is calculated by deducting your allowable expenses from your income.
How Long Will IRS Allow You to Stay on Currently Not Collectible?
Typically, the IRS will allow you to stay on this status until one of several new events takes place. One event could be owing additional taxes. Another event could be increased income amounts being reported. Also, funds reported from sale of property or assets could trigger IRS actions. Even if no triggering event happens, it is not uncommon for the IRS to re-open the case. Usually, they will ask for updated financial information to see if you still qualify about every 2 years. At that time, you need to show that your financial condition has not improved. Then, typically you will be allowed to stay on this status.
It is important to know, that this status does not reduce what you owe. Furthermore, interest and penalties continue to grow. Moreover, it is likely that a tax lien will be filed against you. This can prevent a property sale, and can negatively impact your credit. Still, Currently Not Collectible status can provide much needed help to struggling taxpayers.