It’s important to clarify that under a Currently Not Collectible only qualified taxpayers can request this status. Taxpayers whose wages are considered insufficient to cover other than what is deemed to be necessary living expenses or own less than 20% stake in equity of an asset, can qualify for a Currently Not Collectible status. For more information on the definition and qualification we recommend reading Part 5, Chapter 16, Section 1 of the Internal Revenue Manual. Or you can click here to be redirected to the IRS website.
What Happens During a Currently Not Collectable Status?
While under a Currently Not Collectible status does prevent the IRS from pursuing collections against the taxpayer, it does not wipe away the debt -it only temporarily pauses its collection attempts. The penalties and interest, however, will continue to accrue. You are still expected to back the owed taxes, but only when your financial status improves. The IRS will conduct annual reviews on your tax return to monitor when you do improve.
If a Currently Not Collectible status is the best option in the meantime, Palmer Tax Group can help guide you through the process for applying and getting you enrolled successfully.
Why Palmer Tax Group?
Our professional accountants know the process to protect you and your assets. Having the knowledge of the IRS on your side is the best decision you can make when dealing with the IRS.