IRS Currently Not Collectible Status. What is it? Will it help?
Although IRS Currently Not Collectible Status can be a great deal, being Currently Not Collectible is not as great as an IRS settlement through the Offer in Compromise program. More on that later.
With IRS Currently Non Collectible Status do my unpaid income taxes go away?
Unpaid income taxes do not disappear with IRS Currently Not Collectible Status. IRS does not forgive prior year unpaid taxes. We help classify your unpaid income taxes to be put “on hold.” IRS will want to re-evaluate your financial status at some point in the future. A new financial investigation will be conducted all over again at that time.
Unpaid income taxes that are placed into IRS Currently Not Collectible Status can last from six months to several years. The IRS computer will mail annual balance due notices to you. Income increases, automobile note payoffs, and rent or mortgage decreases are factors that may affect your status.
Invariably, it is almost impossible to estimate how long your IRS Currently Not Collectible Status will last. Most federal income tax negotiating experts like us have seen IRS Uncollectible Status arrangements last from one to five or more years. These are important factors to understand, indeed, so that you may maintain your status are discussed on this page.
Numerous advantages exist regarding IRS Currently Not Collectible Status. Unfortunately, taxpayers are confused because they are not prepared. Once successful in your negotiation you will not be required to make monthly payments on your old taxes.
Without exception IRS requires monthly income and expense verification to approve IRS Currently Not Collectible Status. Candidates for IRS Not Collectible Status must provide several months of pay stubs. Along with the pay stubs, all deductions on your pay stubs must be explanation in detail. You must give three months of bank statements. Rent/mortgage payments must be provided with check copies.
As the applicant, you must provide IRS copies of three months of utility payments with copies of the utility bills. IRS must see copies of car notes. You must give a list of all of your self-employed business accounts receivable because that serves as a source of cash for the IRS. Government managers and reviewers obtain statements from brokerage accounts. Copies of all credit card statements add to the list of requirements. All in all every bit of this trouble could definitely be worth it for IRS Currently Non Collectible Status classification.
You remain in IRS Currently Not Collectible Status only by following all the rules. You default your CNC status by failure to meet specific requirements. One minor mistake can ruin your negotiation so please be cautious. Your must file your tax returns in a timely manner while you are in IRS Uncollectible Status. You must also pay all of your future taxes. An applicant’s failure to respond to periodic IRS requests may also result in loss of status.
What is the difference between IRS Non Collectible Status and an IRS Installment Agreement?
An IRS Installment Agreement allows you to establish an affordable monthly payment that will resolve the tax debt over a long time. IRS Non Collectible Status freezes the tax debt for a period of time to allow you to get into a better financial position so that payments can be made at a later point in time to resolve the tax debt. Unfortunately, the tax debt will continue to accrue interest during the IRS Installment Agreement period, so at the end of the non collectible status you will owe more than you did when your account was originally classified as IRS non collectible status.
What is the difference between IRS Non Collectible Status and an IRS Offer In Compromise?
The Difference Between Being Currently Not Collectible and An Offer in Compromise.
Your interest and penalties accrue steadily regardless of your attempts to slow them down while in IRS Uncollectible Status. However, you should not explode because IRS penalty rates are significantly lower than virtually all banks and definitely lower than credit cards. Your IRS Currently Non Collectible Status provides a safety net for you and also for your family.
A few words of warning regarding IRS Currently Not Collectible Status.
First of all, your attempts at negotiate your own IRS Currently Not Collectible Status for the very first time may prove to be exhausting. However, your hard work can be rewarding since along with your well-deserved success will come satisfaction.