A Tax Professional’s Guide to Qualifying for Currently Not Collectible Status

Are you in need of tax relief but don’t know where to start? Filing for Currently Not Collectible status can be a great option, but it’s important to understand the requirements and the steps involved. In this blog post, we’ll provide you with a comprehensive guide to understanding and qualifying for Currently Not Collectible status so that you can make an informed decision about your financial future.

Introduction to Currently Not Collectible Status

There are a number of reasons why a taxpayer may not be able to pay their taxes. The currently not collectible understands this and has a process in place for those taxpayers who qualify for what is called “currently not collectible” status. This means that the IRS will not take any collection action against the taxpayer for a specified period of time. In order to qualify for currently not collectible status, the taxpayer must demonstrate that they are unable to pay their tax debt. This can be done by providing financial information to the IRS showing that the taxpayer does not have the ability to pay. Once the IRS determines that the taxpayer qualifies for currently not collectible status, they will send a Notice of Intent to Levy and Notice of Your Right to a Collection Due Process Hearing. These notices will explain the taxpayer’s rights and options at this point in the collections process.

Who Qualifies for Currently Not Collectible Status?

If you owe the IRS back taxes and cannot afford to pay your tax debt, you may be able to qualify for Currently Not Collectible (CNC) status. When you are in CNC status, the IRS agrees to temporarily suspend collection activity on your account. This means that the IRS will not try to collect your unpaid taxes from you for a certain period of time.

To qualify for CNC status, you must prove to the IRS that you cannot afford to pay your tax debt. You will need to provide financial information to the IRS, including your income, expenses, and assets. The IRS will use this information to determine whether or not you can afford to pay your tax debt.

If the IRS determines that you cannot afford to pay your tax debt, they will place your account in CNC status. However, this does not mean that your tax debt is forgiven. You will still owe theIRS the full amount of your unpaid taxes, plus interest and penalties. The IRS may also file a Notice of Federal Tax Lien against you.

Even though you are in CNC status, the clock is still ticking on your tax debt. The statute of limitations on collections is suspended while you are in CNC status, but it will start ticking again once your account is taken out of CNC status. This means that if you do not take action to resolve your tax debt before the statute of limitations expires, the IRS may begin collection activity again or even file.