IRS Tax Relief - Currently not Collectible

There are many options to resolve your unpaid tax debt:

1. You can agree with the IRS to make monthly installment payments,

2. You receive an IRS settlement through the IRS Offer in Compromise program,

3. You could eliminate the taxes in bankruptcy (there are restrictions), or,

4. You have an IRS hardship and have your tax debt placed into Currently not Collectible status.

Today we will focus on Currently not Collectible.

Currently not Collectible status occurs when the IRS agrees that you cannot afford to pay your tax debt. IRS enforcement would create an economic hardship for you. It is forbearance by the IRS, a break from enforcement that can last years. In fact, the Statute of Limitations could very well run out on your tax debt.

To obtain currently not collectible status the IRS Tax Attorneys at Flat Fee Tax Service, Inc. will prove your IRS hardship. A financial statement must be provided to the IRS listing your household income and monthly living expenses. If the IRS agrees that after paying allowable expenses such as your rent, a car payment or medical expenses (there are more allowable expenses), you will have no money left to pay your tax debt, the IRS will place you into Currently not Collectible status.

There are many options to resolve your unpaid tax debt:
1. You can agree with the IRS to make monthly installment payments,
2. You receive an IRS settlement through the IRS Offer in Compromise program,
3. You could eliminate the taxes in bankruptcy (there are restrictions), or,
4. You have an IRS hardship and have your tax debt placed into Currently not Collectible status.

Today we will focus on Currently not Collectible.
Currently not Collectible status occurs when the IRS agrees that you cannot afford to pay your tax debt. IRS enforcement would create an economic hardship for you. It is forbearance by the IRS, a break from enforcement that can last years. In fact, the Statute of Limitations could very well run out on your tax debt.
To obtain currently not collectible status the IRS Tax Attorneys at Flat Fee Tax Service, Inc. will prove your IRS hardship. A financial statement must be provided to the IRS listing your household income and monthly living expenses. If the IRS agrees that after paying allowable expenses such as your rent, a car payment or medical expenses (there are more allowable expenses), you will have no money left to pay your tax debt, the IRS will place you into Currently not Collectible status.


IRS Settlement - Currently not Collectible - IRS Hardship
If you qualify for an IRS hardship, you can be placed into Currently not Collectible status. The IRS will leave you alone.

Yes, the IRS will take a back seat to your necessary living expenses, but the expenses have to be reasonable for the IRS to consider you to be in hardship. The IRS applies internal expense guidelines that are called "allowable expenses". Examples of allowable expenses are car payments, housing, and utilities, food, clothing and supplies, medical insurance, household utilities, child support, term life insurance. The IRS calls this Collection Financial Standards.

On the asset side, the IRS will consider you in hardship if your seizing your assets would either not result in any money paid (i.e, no equity in your property) or doing so would create a hardship (seizing your car means you cannot get to work, go to the grocery store, etc.).

If, after applying the IRS expense guidelines (Collection Financial Standards) it can be shown that there is no money left to pay the IRS and doing so would put you into IRS hardship to pay reasonable living expenses, the IRS will place you into Currently not Collectible status and, yes, the IRS will leave you alone.



Our IRS Tax Attorneys Can Protect You, No Matter Where In The USA You Live

The IRS sends a letter out confirming you as Currently not Collectible and that they will not bother you. This is IRS Letter 4223. At the top of IRS Letter 4223, in bold print, has the words “Case Closed – Currently Not Collectible.”

The first two lines of the IRS Currently not Collectible letter tell you everything: “We have temporarily closed your collection case for the tax types and periods listed below. We have determined that you do not have the ability to pay the money you owe at this time.”

The IRS’s authority for placing you into Currently not Collectible can be found in IRS Policy Statement 5-71, which states that (1) if, after taking all the steps in the collection process it is determined that an account receivable is currently not collectible, it should be so reported in order to remove it from active inventory (2) a hardship exists if the levy action prevents the taxpayer from meeting necessary living expenses. Internal Revenue Manual 5.16.1 has comprehensive instructions for the IRS marking accounts as uncollectible.

Internally, the IRS will make a notation in their computer database that your account is Currently not Collectible. In addition to Letter 4223, IRS account transcripts can be obtained with a line item reading “Case Currently Not Collectible.”

Currently not Collectible is a great option to combine with the limitations on how long the IRS can collect your tax debt. The IRS has 10 years to collect a debt, starting from the date you first owed them (i.e., filed the return). Currently not Collectible determination can literally last for years. While you’re in IRS hardship, you will live uninterrupted by the IRS debt and have time lapse to your benefit. The IRS can be fair to those who truly cannot afford to repay taxes from past mistakes.

Proving to the IRS that you qualify for an IRS hardship status and receiving IRS Letter 4223 – Case Closed – Currently Not Collectible can be the beginning of the end to your tax problems.

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