Steps for Requesting Currently Not Collectible Status
- Discuss all the options and consequences of currently not collectable status with taxpayer.
- Fill out form 433-F (433-A if debt exceeds $25,000).
- If the taxpayer's necessary expenses exceed their income they may be eligible for CNC status.
- If the taxpayer has equity in real property the IRS may require that the taxpayer be turned down for a home equity loan before they will place the taxpayer in CNC status.
- Flat Fee Tax Service will then request your client's account be placed in Currently not Collectible (CNC) status and then go through the financial statement.
- Within 2 weeks, Flat fee Tax service should have a confirmation that the account has been placed in Currently not Collectible (CNC) status.
Is Our Client a Good Offer in Compromise (OIC) Candidate?
- All Required Tax Returns Must be Filed: The taxpayer must have filed all necessary tax returns prior to submitting an offer in compromise.
- Current Income and Expenses: Do the taxpayer's expenses currently exceed his or her income? The offer amount formula will require a taxpayer to include in the offer amount any income left after necessary expenses are deducted for each month, times 48 or 60 (depending on the length of time needed to make all payments).
- Taxpayer's Assets: The IRS will typically want 80% of the equity of any assets the taxpayer owns, including cars and houses. If you owe on your autos or lease, this is not an issue. If you rent or have little to no equity in your home, once again, this is not an issue. If your vehicles will be valued at "auction prices."
- Taxpayer's Future Earning Potential: If the client is currently unemployed or underemployed but has the potential to earn more in the future, the IRS will be less likely to accept a request for an Offer in Compromise. As an example, if you are a physician and have not been practicing, for whatever reason, and will be going to be going back to work as a physician with a high income, then you may not be eligible. Future Earning Potential is not a factor for hourly workers or workers whose income will stay level.
- Is the Amount of the Back Tax Debt Correct?: Not only is there an Offer option called "doubt as to collectibility", there is an Offer in Compromise option called "doubt as to liability," this allows you to make an offer even if the taxpayer may have the ability to pay the debt, if there is evidence that the debt is incorrect.
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FLAT FEE TAX SERVICE, INC. INCOME TAX RELIEF FEES ARE:
• Fixed with no hidden charges
• Payable in monthly installments
• Low initial payment to begin work
• Always competitive and affordable