Currently Not Collectible: Unlocking The Powerful Tax Relief Secret

Currently Not Collectible

What Does Currently Not Collectible Mean IRS?

Currently Not Collectible (CNC) is a status that the IRS may assign to a taxpayer's account, indicating that the taxpayer is temporarily unable to pay their tax debt due to financial hardship. When an account is placed in CNC status, the IRS temporarily stops all collection activities, including levies and garnishments.

To qualify for CNC status, a taxpayer must provide detailed financial information to the IRS, including income, expenses, and asset values, to demonstrate that they do not have the means to pay their tax debt without causing significant financial hardship.

It's important to note that CNC status does not eliminate the tax debt, and penalties and interest will continue to accrue on the unpaid balance. However, it does provide temporary relief from collection activities. The IRS will periodically review the taxpayer's financial situation to determine if it has improved enough to resume collection activities.

Additionally, the IRS may file a tax lien against the taxpayer’s property while the account is in CNC status to protect the government’s interest in the tax debt. Because the CNC status and the application process can be complex, it may be helpful to consult with a tax professional or a tax attorney who can help you navigate the process and determine if this is the best option for your situation. One important thing to consider is that the IRS may still continue collection activities such as garnishing wages or levying bank accounts even while the account is in CNC status. It’s also crucial to keep in mind that entering into CNC status does not exempt you from filing your tax returns or paying any taxes due in future years. For more personalized advice, it’s a good idea to hire a tax professional who can provide tailored guidance for your specific circumstances. And remember, sometimes the best way to lower your tax liability is to hire your kids.

IRS Currently Not Collectible Status Aka Currently Not Collectible

Currently Not Collectible Occurs In Financial Situations When There Are Times When You Understand That You Owe The IRS And Due To Your Current Financial Situation, You Are Unable To Pay The Amount Of Can't Pay Back Taxes, Penalty, And Interest Due.

When the IRS decides that you can't afford both your taxes and living expenses, the account may be placed in the status of Currently Not Collectible (CNC).

While your account is currently not collectible, the IRS generally won't try to collect from you.

Keith CPA
Keith CPA

Does Currently Not Collectible Status Affect The 10 Year Statute Of Limitations

The "Currently Not Collectible" (CNC) status does not stop the statute of limitations on tax debt from running. The IRS generally has 10 years from the date of assessment to collect a tax debt. This 10-year period is known as the "collection statute expiration date" (CSED).

If your account is placed in CNC status, the time spent in that status still counts toward the 10-year collection period. So, if your account is in CNC status for 3 years, the IRS will have 7 years left to collect the debt once your account is removed from CNC status.

It's also important to note that certain actions, such as filing for bankruptcy or submitting an Offer in Compromise, can temporarily suspend the running of the statute of limitations.

Because the rules surrounding the collection statute expiration date and the Currently Not Collectible status can be complex, it may be helpful to consult with a tax professional or a tax attorney to understand how these rules apply to your specific situation.

The IRS May Place Your Accounts In CNC Status, Even If You Have Unfiled Returns And Are In A Hardship Situation, If You Meet The Requirements. The Currently Not Collectible Form Is A 433-F.

It won’t levy your assets or income. Although the IRS has temporarily closed your case. you still owe the money to the IRS. They may reopen your case in the future if your financial situation improves. Also, since you still owe money, the IRS will continue to add penalties and interest to your account and it will be subject to other adjustments and offsets, such as applying future tax refunds to the amount you owe. However, the IRS will still assess interest and penalties to your account, keep your refunds and apply them to your debt. You’ll also continue to receive an annual bill from the IRS because that is required under the law. If you are unable to pay the full amount you owe, you may want to consider applying for the IRS penalty abatement process. This process allows taxpayers to request relief from certain penalties imposed by the IRS. You can submit a request for penalty abatement along with your payment plan or offer in compromise to the IRS. It’s important to carefully follow the guidelines and provide appropriate documentation to support your request for penalty relief.

 

Before The IRS Will Place Your Account Is In Currently Not Collectible Status, It May Ask You To File Any Past-Due Tax Returns. If You Request Currently Not Collectible Status, The IRS May Ask You To Provide Financial Information, Including Your Income And Expenses, And Whether You Can Sell Any Assets Or Get A Loan. Additionally, the IRS may also require you to complete IRS Form 433-F, which is a Collection Information Statement. This form provides detailed information about your financial situation, including your assets, income, and expenses. In some cases, the IRS may also require you to submit IRS Form 843, Claim for Refund and Request for Abatement, if you believe that the taxes owed are incorrect or if you qualify for certain relief programs. It’s important to comply with these requests in a timely manner to avoid any further enforcement actions by the IRS. If you are struggling to navigate the process of obtaining Currently Not Collectible status or need assistance with IRS tax relief services, it may be beneficial to seek help from a qualified tax professional. They can guide you through the necessary steps and ensure that you provide the IRS with the information they require. Additionally, they can help you explore other tax relief options that may be available to you, such as an Offer in Compromise or installment agreement. Working with a tax professional can alleviate the stress and uncertainty that often comes with dealing with the IRS. If you have already had a tax lien placed on your property, it’s important to understand the IRS tax lien release process. This process involves satisfying the tax debt or entering into an agreement with the IRS to release the lien. A tax professional can assist you in navigating this process and reaching a resolution with the IRS. By seeking professional help, you can take the necessary steps to address your tax issues and work towards a favorable outcome. If you are facing an IRS tax audit, it is crucial to have proper representation to ensure your rights are protected and that you are not being unfairly targeted. Seeking professional IRS tax audit representation service can provide you with the expertise and guidance needed to navigate the audit process and address any issues that may arise. By enlisting the help of a tax professional, you can have peace of mind knowing that you have an advocate on your side to help you achieve the best possible outcome. They can handle communication with the IRS on your behalf and work to resolve any discrepancies or concerns that may arise during the audit. Filing taxes late penalties can be a burden, but with the help of a tax professional, you can work towards resolving your tax issues and avoiding further penalties. By addressing the IRS’s requests and providing the necessary information, you can take steps towards achieving Currently Not Collectible status and finding relief from your tax debt. A tax professional can also assist you in understanding the potential consequences of filing taxes late and help you develop a plan to avoid such penalties in the future. It’s also important to address any unfiled tax returns as part of the process of obtaining Currently Not Collectible status. The IRS may request that you file these returns before they consider your request for relief. Filing all past-due tax returns is crucial to demonstrate your compliance with tax laws and to present a complete picture of your financial situation to the IRS. Failure to address unfiled tax returns could result in your request for Currently Not Collectible status being denied. Seeking professional guidance can help you navigate these requirements and ensure that you take the necessary steps to achieve a favorable outcome with the IRS. If you are overwhelmed by the prospect of dealing with the IRS and the complexities of tax law, seeking assistance from a tax professional can provide peace of mind and assurance that you are taking the right steps toward resolving your tax issues. In addition to helping you with Currently Not Collectible status, a tax professional can also assist you in exploring other back tax relief options that may be available, such as penalty abatement or innocent spouse relief. By enlisting the help of a qualified professional, you can navigate the IRS processes and requirements with confidence and work toward achieving a favorable resolution to your tax debt.

During the time the IRS collects the balance you owe, it may review your income annually to see if your financial situation has improved. TheCPATaxProblemSolver specializes in a great array of tax debt resolutions, including dealing with currently not collectible (CNC) accounts. They can help you navigate the IRS’s review of your income and develop a plan to protect your assets and income from potential collection actions. TheCPATaxProblemSolver can assess your specific situation and provide expert advice on the best tax resolution strategies to address your CNC account and resolve your tax debt. Their team is dedicated to finding the most effective and personalized solution for each client. They will work with you to explore all available tax resolution options, such as offers in compromise, installment agreements, and innocent spouse relief, to find the best course of action for your unique circumstances. TheCPATaxProblemSolver understands the complexities of the tax code and will leverage their expertise to guide you through the process and achieve the most favorable outcome for your CNC account. Their goal is to provide you with peace of mind and a clear path towards resolving your tax debt.

See my blog, 5 IRS Tax Relief Programs for more information.

Speak to Keith Jones, CPA TheCPATaxProblemSolver about Tax Debt Relief.

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Understanding Currently Not Collectible

CNC indicates that a taxpayer has no ability to pay his or her tax debt. That taxpayer must demonstrate that they are in a state of severe financial hardship. They can’t even liquidate assets or make monthly payments to clear their back taxes. In these circumstances, the IRS declares that an individual’s account is currently not collectible.

As a taxpayer, you are required to submit substantiating documentation and detailed financial forms to the IRS agent for a thorough review. Once the IRS officially declares that you are currently not collectible, they must stop all collection activities, including wage garnishments and bank levies. Next, the IRS is required to send annual statements to the taxpayer, which remind him or her about the amount of tax still owed. However, it is not viewed as a bill. If the IRS cannot collect the tax within a 10-year statutory period, the debts automatically expire.