An Option For Taxpayers with IRS Tax Debt: Currently Not Collectible Status

Plenty of taxpayers are behind on their taxes and are currently discovering themselves to be in a situation where IRS tax debt resolution seems imposs...

 

Plenty of taxpayers are behind on their taxes and are currently discovering themselves to be in a situation where IRS tax debt resolution seems impossible, due to financial constraints, such as unemployment.  These individuals may be able to contribute to resolving their IRS tax debt in the future but currently do not have the means to do so.  If the preceding situation sounds similar to your own, then you may be able to obtain IRS tax relief by filing for Currently Not Collectible status.

Before an individual will be placed in Currently not Collectible (CNC) status, his/her financial records will be thoroughly investigated.  More specifically, his/her monthly earnings will be weighed against allowable monthly expenditures, which are expenses IRS Code deems reasonable.  In the event that a taxpayer’s expenditures almost outweigh, or outweigh, his/her earnings, the individual may qualify for CNC status.

As a part of the investigation, the IRS will look for any assets owned by the taxpayer that could be used to pay off the IRS tax debt.  Home equity, second vehicles, additional monetary funds in any bank accounts, or any assets that could be traded for cash.  If the determination is that no cash would become available by liquidation of assets, or that said liquidation would cause undue hardship, then the taxpayer may still qualify for being placed in CNC status.

Overdue accounts find it more difficult to find IRS tax relief.  They will be investigated closely and will proceed with a negotiation, requiring proof of income, expenditures and any and all assets owned by the taxpayer before providing IRS tax relief.

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