CURRENTLY NOT COLLECTIBLE (CNC)

IRS NON-COLLECTIBLE TAX DEBT

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Uncollectible Tax Debt in San Diego, Los Angeles, Southern California, Texas, North Carolina, Georgia, Washington, New York, and the entire United States.

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What to Know About Currently not Collectible

(IRS Financial Hardship) in San Diego,
California and all 50 States

What is Currently not Collectible (non-collectible tax debt)? If you owe a tax debt to the Internal Revenue Service, the agency will attempt to enforce collection of your tax debt by taking your assets and income (tax levy/IRS garnishment). Should the IRS decide that you cannot pay your tax liability due to a financial hardships situation, they will issue a provisional hold on the collection and move your tax case into a status called “currently-not-collectible”, or CNC.

When it is proven to the IRS that the taxpayer is unable to meet their tax obligations, the IRS will prepare a Form 53 and follow the relevant instructions attached thereto. A taxpayer that wishes to obtain Currently Not Collectible status may also be required prove that he or she lacks sufficient assets with which to satisfy the tax debt and that the taxpayer has insufficient income to satisfy that debt; this must be shown through the filing of a Collection Information Statement (CIS) not more than 12 months old.

While this Collection Information Statement will usually be Form 433-A, Form 433-F can also be used instead of Form 433-A if the taxpayer is a wage earner and the potential trust fund recovery penalty (TFRP) liability is less than $100,000. In addition, the taxpayer will undergo an annual IRS review, which the IRS conducts to ensure that a sound basis remains for the designated Currently Not Collectible status accorded a taxpayer. Thus, taxpayers may be required to fill out and re-submit a Collection Information Statement on an annual basis.

If my back taxes are placed in uncollectible status,

do I still have to pay?

Interest and penalties will continue to accrue while cases are in Currently not Collectible (non-collectible) status. Being in Currently not Collectible status will usually last from 18 to 24 month before the IRS will re-evaluate your finances.

It is routine for the agency to set a follow-up date of two (2) years from the date your tax liability was moved into uncollectible status. If, after the follow-up review by the IRS, your income has not increased, your case will again be placed into non-collectible status.

When a person is able to secure non-collectible status, there will be no effort to collect on the tax owed, but penalties and interest continue to accrue.

 

You may attempt to secure Currently not Collectible status on your own, however, we recommend you have an IRS Tax Attorney handle for you.
 

3 WAYS TO ATTEMPT TO GET NON-COLLECTIBLE STATUS

  • Request at the time of levy release request,

  • When dealing with a revenue officer or appeals officer, make the request (be prepared with Form 433)

  • File an IA request, asking for a payment of $0.00
     

Type across the face of the IA request, “seeking non-collectible status.”

  • Provide Form 433A and attach a short narrative.

  • The grounds for non-collectible status are the same as for a levy release; most establish that taxpayer has less income than allowed expenses.

Is Currently not Collectible Your Best

Tax Relief Option?

The answer is "YES and NO". How's that for an answer? Being placed into Currently not Collectible status is the correct move for you if your tax debt is less than $10,000. That's the minimum amount to do an Offer in Compromise. It's the right decision if you have some assets and can't access them. If having a federal tax lien does you no harm, then it's a great decision. You may be able to run out the Statute of Limitations on your tax debt by being non-collectible.

We always tell taxpayers who call in, that the difference between being Currently not Collectible and doing an Offer in Compromise is like a marathon runner deciding to stop running when he/she is 200 yards from the finish line. Why not run the remainder of the race and settle your tax debt once and for all? Why go "half-way"?

To find out what the best tax relief option for you would be, give our tax professionals a call. the consultation is free and your eyes may be opened as to the possibilities.

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