COVID Has Wrecked Your Business: Are You Eligible For Non-Collectible Status?

Running a business has never been easy, but the challenges of yesteryear may seem tame compared to the struggles of pandemic entrepreneurism. The last thing you want to think about right now is the IRS — but if you get behind on your taxes, you could be in for a world of trouble.

Thankfully, a temporary solution may be available in the form of non-collectible status. Although typically associated with individual taxpayers, IRS Currently Not Collectible (CNC) is also available for select businesses.

Which Businesses Are Eligible for CNC Status?

As a business owner, you’ll need to clear several hurdles prior to obtaining CNC status. First up: your classification as a business entity.

Your chances are far better if you run a sole proprietorship. Likewise, you may qualify as the owner of an LLC or partnership, but only if you could be found personally liable for unpaid taxes.

Your economic status also plays heavily into eligibility. To qualify, businesses — like individuals — must currently be experiencing significant financial hardship, as determined by the IRS.

How Do I Qualify For Business CNC?

While certain situations make qualifying easier for business owners, it’s impossible to know for sure if you’re eligible until you make an official request. To do so, you may need to complete Form 433-F, which is also known as the Collection Information Statement. This document gives you the opportunity to clue the IRS in on your current financial struggles. You’ll need to provide details on current employment income and personal assets, as well as accounts receivable.

While you can call the IRS to discuss your current ability (or lack thereof) to pay employment taxes, you’re more likely to successfully achieve CNC status with help from a tax resolution specialist. An enrolled agent can handle your tax situation on your behalf, obtaining a temporary delay in collections or even solutions that reduce your total debt burden.

Struggling with the economic fallout of COVID? Why add IRS drama to your ever-growing list of concerns? Reach out to learn how the Highland Tax Group can help you obtain a realistic solution.