Are you unable to pay back IRS taxes? If you owe the IRS but have little to no income, the IRS can declare you "Currently Not Collectible." A Currently Not Collectible status can apply to those who are currently not working (whether due to sickness, serious illness, age, disability, etc.) or have no assets, such as a house or vehicle, of any liquidation value that the IRS can levy as payment for back IRS taxes. Simply put, you owe the IRS but are only making enough money to pay for your most basic necessities to live.
How Does a Currently Not Collectible Status Benefit Me? If you are considered Currently Not Collectible, the IRS will, for the time being, stop any and all collection actions they may have already begun towards you to collect your back IRS taxes. These collection actions include any IRS bank levy, IRS wage garnishment, and so on. While you owe the IRS and are in a Currently Not Collectible status, the collections statute of limitations of 10 years is still in effect. This means that if you owe the IRS but are considered Currently Not Collectible during and to the end of the 10-year period, your debt for your back IRS taxes is wiped.
What Are My Responsibilities as a Currently Not Collectible Person that Owes Back IRS Taxes? Every year, you will be responsible for submitting an updated financial statement to the IRS to show that your financial situation has not changed and that you should remain in a Currently Not Collectible status. That is, you still are not earning enough income to pay what you owe the IRS. The IRS will review your statement for accuracy, comparing it to your yearly filed tax returns, to verify that you still are not in a good enough financial position to pay your back IRS taxes.
What Is the IRS Responsible for? The IRS is responsible for sending you an annual statement each year with the amount you still owe the IRS. Be aware that even though you do still owe back IRS taxes, this annual statement is not a bill.
Does a Currently Not Collectible Status Mean I No Longer Owe the IRS? "Currently Not Collectible" is a temporary status that may change at any time. Every year, the IRS monitors your financial situation for any changes that could transform you to a collectible status. While you are in a Currently Not Collectible status, you still technically owe the IRS back IRS taxes and interest, and interest does continue to accrue. You are just essentially marked in their system as unable to pay.
For example, say you owe the IRS but cannot work due to disability, and your financial situation changes. Maybe you go back to work, you receive an inheritance, etc. If the IRS sees that you have become capable of paying your back IRS taxes, your status will be changed to collectible, and the IRS will resume their efforts to collect your back IRS taxes and any appropriate penalties and interest.
If you owe the IRS, call us today at 800-590-4524 or fill out the form on the right to find out if you can be declared Currently Not Collectible and have your back IRS taxes wiped!
