The Process of Qualifying for Currently Not Collectible Status

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The Internal Revenue Service (IRS) has a process for taxpayers who are unable to pay their taxes to request what is called “currently not collectible” status. This means that the IRS will temporarily suspend collection activity on the taxpayer’s account. To qualify for currently not collectible status, the taxpayer must submit financial information to the IRS showing that they cannot afford to make any payments on their tax debt.

If the how to get currently not collectible status determines that the taxpayer qualifies for currently not collectible status, they will send a formal notice to the taxpayer and their tax debt will be placed in what is called “non-collectible status.” The IRS can still take legal action to collect the debt, but they will not take any active steps to collect while the account is in non-collectible status.

It’s important to note that even though an account is in non-collectible status, the interest and penalties on the tax debt will continue to accrue. This means that even though taxpayers are not required to make any payments on their tax debt while in non-collectible status, their debt will continue to grow larger over time.

There is no set time limit for how long an account can remain in non-collectible status. However, the IRS will periodically review accounts in non-collectible status to determine if circumstances have changed and if collection activity can resume.

Tips for Maximizing the Benefits of Currently Not Collectible Status

If you are having difficulty making your tax payments, you may be able to qualify for Currently Not Collectible (CNC) status. This means that the IRS has determined that you cannot afford to pay your taxes at this time and will not take collection action against you. However, it is important to note that CNC status is not permanent and the IRS can revisit your case at any time. Here are some tips for maximizing the benefits of CNC status:

1. Keep up with your filing requirements

Even though you are not required to make tax payments, you must still file your tax returns on time. This will help to avoid penalties and interest accruing on your outstanding balance.

2. Review your financial situation regularly

Your circumstances may change over time and you may eventually be able to afford to make tax payments again. As such, it is important to review your finances periodically and update the IRS on any changes.

3. Stay in contact with the IRS

Although the IRS will not be actively pursuing collection action against you, it is still important to stay in communication with them. This way, you can keep them updated on your financial situation and work together towards a resolution when possible.