Currently Not Collectible
Taxpayers under serious financial stress and behind on tax payments quickly find out that the IRS makes that stress a whole lot worse. The IRS will continue enforcement actions including sending notices and demand for payments until you take action. If you cannot make a payment towards your IRS tax debt because of economic hardship, then you should consider filing for IRS currently not collectible status.
What are the Benefits of Currently Not Collectible Status?
Currently not collectible status is a legal option that stops collection activities, including the enforcement of liens, levies and wage garnishment, and provides taxpayers with temporary or sometimes permanent relief from the stress of IRS enforcement actions.
Currently not collectible status may be used as part of an overall plan to reduce existing tax debts over a period of time when other options are currently unavailable but may become available in the future. The 10 year statute of limitations on collections continues to run and may expire for accounts in currently not collectible status.
Are there any disadvantages to currently not collectible status?
While currently not collectible account status stops enforcement activities at the time the IRS grants the status, it does not stop the accumulation of interest and penalties during the period that the IRS enforcement activities have ceased. Interest may continue to grow and often is a substantial portion of the tax balance due if currently not collectible status is lifted. For taxpayers expecting ongoing currently not collectible status beyond the statute of limitations period, this may not be a big concern.
Another concern may be state income tax debts. While states like Michigan may have programs similar to the IRS Offer in Compromise program, there is no comparable currently not collectible Michigan program.
How to File Currently Not Collectible with the IRS
If you have questions regarding how to obtain currently not collectible status with the IRS, hiring a qualified tax attorney to help you may be the best option. IRS Currently Not Collectible status may be filed with the IRS using Form 433-F. This form requires information about income, assets, debts and other information necessary for the IRS to determine whether a taxpayer qualifies for currently not collectible status. Hiring a tax attorney may streamline the process and freeze collection activity before wages are garnished or other property is seized.
In addition, hiring a tax attorney that handles IRS tax relief cases to begin the tax resolution process may provide you with a clear roadmap to resolve tax debts after your economic hardship has ended and you begin to have income available to pay your tax debts. The IRS may restart collection activities at that time and an installment agreement or offer in compromise may be necessary to resolve your tax debt.
Contact Steiger Tax Law for a Free Currently Not Collectible Consultation
Steiger Tax Law will provide you with a free consultation to help you determine if IRS Currently Not Collectible account status is an appropriate tax relief option for you. If you need help with how to apply for currently not collectible status, contact Michigan tax attorney Andrew Steiger at (248) 259-6367 to discuss your IRS tax debt and develop a plan to help you eliminate or manage repayment of your IRS tax debt.
Contact Michigan Tax Attorney Andrew Steiger for free consultation to resolve your tax debt and discuss the currently not collectible program. Information shared is confidential and protected by attorney-client privilege. Free consultation does not establish attorney-client relationship.