The IRS will consider a taxpayer’s current financial situation when determining whether they should be required to make payments toward an outstanding tax debt. If a review of the monthly household income and expenses of the taxpayer suggests that they do not have excess monthly income and making a payment to the IRS would cause a hardship, the IRS will allow their account to be placed in not collectible status. While in not collectible status, the IRS will not pursue enforcement action such as bank levies or wage garnishments while the statute of limitations continues to run (tax liabilities generally expire after ten years), and the taxpayer is not expected to make any payments toward the debt for a period of at least two years. After this time, the IRS may periodically review the account and the taxpayer may be required to start making payments if their financial circumstances have changed.
The Tax Professionals at New World Vision have extensive experience working with IRS Appeals Officers, Revenue Officers and Collection Agents and understand how the IRS will interpret a taxpayer’s financial information. We do the financial analysis with our clients to determine whether they are candidates for currently not collectible status and work with them to obtain the necessary supporting documents to successfully establish the resolution. We have obtained non-collectible status for thousands of clients even when they have had significant equity in assets and/or have historically been high income earners.
See What the IRS Has to Say About Currently Not Collectible:
https://www.irs.gov/businesses/small-businesses-self-employed/temporarily-delay-the-collection-process
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