Currently Not Collectible
Are you getting bombarded with calls and letters from the IRS regarding your tax debt? Do you have no financial ability to pay back this tax debt? If this is you, help exists. One of the ways to get out of your tax debt is to receive a Currently not Collectible designation. This designation from the IRS places you under a financial hardship status. You are declared Currently not Collectible once the IRS determines that you cannot pay your tax debt.
When your account becomes Currently not Collectible, the IRS must stop all collections actions from being taken. What this means is they’ll have to put an end to their harassing letters and phone calls. Also, the IRS will no longer be able to garnish your wages from your employer. If you don’t have the financial means to pay your tax debt, you could qualify for Currently Not Collectible status. To discover if this option is for you, call the expert tax relief team at Platinum Tax Defenders today. Platinum Tax Defenders have years of experience in helping clients pay back their taxes. Their tax relief professionals can walk you through the process to determine if you’re eligible for Currently Not Collectible status.
WHAT DOES CURRENTLY NOT COLLECTIBLE STATUS MEAN?
Currently Not Collectible is a designation that a delinquent taxpayer can receive from the IRS. If you are approved for Currently Not Collectible status, the IRS will temporarily place a hold on any current collections. When the IRS halts collection actions, tax liens, bank levies, and wage garnishments placed on the taxpayer are temporarily released. Getting Currently Not Collectible status designation will stop the IRS from taking collection action on your assets. While in a Currently Not Collectible condition, the IRS will also stop sending threatening letters. Any further collection activities that the IRS has placed will end until your financial situation improves.
WHO IS ELIGIBLE FOR CURRENTLY NOT COLLECTIBLE STATUS?
For a taxpayer to qualify for Currently not Collectible designation, they must demonstrate financial hardship. Financial hardship means the person has no money left over after paying for basic living needs. The taxpayer would have to show proof that paying their tax debt would create severe economic hardship for them. A severe economic hardship is more than a setback or financial inconvenience. You can be determined as Currently Not Collectible if:
- Your income wages cover no more than what you need to get by. When your income pays for just what you need to get by, there’s no money left for the IRS to garnish.
- There are no assets you own, such as valuable property, that would be worth the IRS levying. The IRS cannot seize any assets from the taxpayer if they have less than 20 percent equity in the item. Also, the IRS can’t seize assets if the collecting cost is worth more than the asset.
To determine your necessary living expenses, the IRS will add up your income and subtract regular living expenses. Everyday living expenses are broken up into the following four categories:
- food, clothing, and miscellaneous expenses
- healthcare expenses paid out-of-pocket
- housing and utility costs
- transportation costs
The IRS will tally up your combined standard costs and subtract them from your total take-home income. After they do that math, they’ll determine what is left. The funds leftover would, in theory, go towards tax payments. However, the IRS could decide that paying taxes after your necessary living expenses would put you at an economic disadvantage. If this is determined, they might consider your account as Currently Not Collectible.
HOW DO I GET CURRENTLY NOT COLLECTIBLE STATUS?
To get Currently not Collectible status, you or your tax professional should contact the IRS. You can contact the IRS by writing them or calling them. However, it’s most often quicker to interact with the IRS by phone. That way, the IRS can tell you precisely what you need to prove your financial hardship. Also, having your financial information readily available will make the process go much quicker. Financial information you’ll need includes proof of your income and expenses. You can fax these documents directly to the IRS during the call. If you provide the IRS with all that they need immediately, you’ll get an immediate preliminary decision.
Currently not Collectible status may not last forever. The IRS will continue to review your financial situation each year to see if it improves. If they determine you can pay your taxes again, they’ll make you pay. The IRS will contact you if they need more current financial information about your Currently not Collectible status.
If you’re considering applying for Currently Not Collectible status, get an expert opinion from tax relief professionals first. The experts at Platinum Tax Defenders can work with you to assess your financial situation. Our team will help you determine whether you’re a likely candidate for Currently Not Collectible status.
IS THE CURRENTLY NOT COLLECTIBLE STATUS PERMANENT?
If your account is uncollectible, the IRS will stop its collection process until your financial situation improves. The IRS will also wait until another form of tax resolution becomes more plausible. The IRS must immediately cease all collection activities as soon as the IRS declares you Currently Not Collectible. However, interest and penalties will continue to build on your unpaid taxes. Also, you’ll have to continually provide proof of your financial situation to remain in Currently Not Collectible status.
If your financial situation has been shown to improve, the IRS will resume its collection process. The IRS has ten years from the date of assessment to collect all taxes, penalties, and interest. After this statute of limitations has expired, the taxpayer no longer owes anything to the IRS. Therefore, in a Currently Not Collectible status, you will not have to make payments to the IRS. Also, the IRS must stop all further collection activities. And after ten years from the date of assessment, the taxes, penalties, and interest will go away.
CAN THE STATUTE OF LIMITATIONS BE EXTENDED FOR CURRENTLY NOT COLLECTIBLE CASES?
The 10-year statute of limitations can get extended for a variety of reasons. These reasons can include any of the following if they happen within ten years:
- A taxpayer waives the 10-year statute of limitations in writing
- A request for An Offer in Compromise is issued
- The taxpayer files for bankruptcy
- File a Request for Taxpayer Advocate Service Assistance (form 911-ATAO)
- Submit a Request for a Collection Due Process or Equivalent Hearing (form 12153-CDP)
Each of these actions will extend the statute of limitations.
In some cases, these actions may reset the full ten years. If ten years in the tax’s life remain, a Currently Not Collectible status can be a temporary measure. Currently Not Collectible status does not eliminate the back-tax debt; it only stops collections. If a person qualifies for Currently Not Collectible consideration, they may also be a candidate for an Offer in Compromise.
WHAT HAPPENS DURING CURRENTLY NOT COLLECTIBLE STATUS SITUATIONS?
Once the IRS designates a taxpayer’s account as Currently Not Collectible, they can no longer continue to take collection actions. Therefore, the IRS is obligated to lift any tax liens and bank levies. The IRS must also refrain from garnishing your wages. As a bonus, the threatening calls and the letters from the IRS will stop.
GET HELP FILING FOR CURRENTLY NOT COLLECTIBLE STATUS
Once you are deemed in Currently Not Collectible status, it doesn’t mean that your debt goes away right away. If your financial situation improves within the 10-year statute of limitations, your tax payments will start again. If you owe the IRS or the state, and cannot afford the fees, contact us at Platinum Tax Defenders. We’ll protect you and your family from collection actions. Our team will determine whether a Currently Not Collectible option is the first or last step in your tax relief process.
Platinum Tax Defenders
WHO WE ARE
Platinum Tax Defenders is a full-service tax resolution firm in Los Angeles that has been helping taxpayers resolve their IRS and State tax issues since 2011. Our team of tax attorneys, accountants, and enrolled agents have a combined more than 90 years of experience in the financial services industry. Our team is ready to provide tax relief services to clients facing wage garnishments, bank levies, liens, and other challenges.
WHAT WE DO
Platinum Tax Defenders is a full-service tax resolution firm that includes a tax attorney, IRS enrolled agents and certified public accountants specializing in providing tax relief services for taxpayers facing IRS or State tax debt. We work with the IRS on your behalf to come up with reasonable payment options and settlements. Our tax professionals are knowledgeable and experts in tax negotiations. The consequences of unpaid taxes vary by each individual taxpayer’s situation. But unpaid tax debt can lead to wage garnishment, property liens, and bank account levies.
Platinum Tax Defenders will help you reach a tax resolution plan before it’s too late. We offer fast response protection to our clients and a commitment to gaining major tax reductions. Whether this is your first time facing a tax problem, or you have previously hired a tax relief firm in Los Angeles to resolve your tax debt, we have a track record of consistently garnering IRS settlements for our clients.
WHY TRUST US
At Platinum Tax Defenders, we’ve developed an impeccable reputation for doing what’s best for our clients, 100 percent of the time. We are honest and upfront with you about your tax debt situation, and the type of tax resolution services we can provide. Each individuals’ tax situation is different, and we’ll do whatever we can to negotiate with the IRS to help you reach a tax relief plan that works for you. We are experts in our field and work diligently to resolve the specific tax issues that each of our clients faces. Platinum Tax Defenders offers fair and honest tax resolution services, and you can count on us to operate professionally and legally.
Many tax relief services in Los Angeles tend to make unrealistic promises. You can count on us to always be honest and upfront about your financial situation, and what type of tax resolution results you should expect.