Currently Not Collectible
Obtaining Currently Not Collectible status with the IRS can be a great option for individuals and businesses who are currently unable to pay what they owe in taxes and need relief from collection actions. If you’re dealing with financial hardship and can demonstrate an inability to pay, you may be eligible for Currently Not Collectible status. The Highland Tax Group can help you determine whether this is your best strategy for obtaining tax relief, and we’ll work on your behalf to ensure you are protected from aggressive collection actions that could do further damage to your finances or business.
What Does Currently Not Collectible Mean?
Currently Not Collectible is a designation granted by the IRS when they determine you are genuinely unable to pay your federal income taxes. It’s considered a temporary measure—a “time-out,” if you will—during which the IRS suspends collection activities against you, including tax levies and garnishments, to allow you time and space to regroup. Under this status, the IRS assumes you are serious about resolving your tax issues but are currently incapable of doing so—with the expectation that you will at some point attempt to resolve the debt.
Qualifying for Currently Not Collectible Status
To be eligible for this status, you’ll need to provide financial information to the IRS that clearly demonstrates that:
- Your total back-tax liability is far higher than your current income and allowable expenses will permit you to pay; and
- You have no assets you could sell to resolve the debt.
While you are in Currently Not Collectible Status, the IRS will not take collection action against you, but they will monitor your financial situation to see if it improves. Additionally, CNC status stops the IRS from issuing levies and garnishments, but they may still put liens on your property, and if you sell, the money will go to the IRS.
Perhaps you’re having a difficult time putting food on the table or keeping the lights on. Maybe your business is taking losses month after month. Maybe you have a medical condition that limits you from working, or you have a sick family member whom you need to take care of. If so, Currently Not Collectible can buy you the time you need to get back on track toward resolving your IRS tax liability. The Highland Tax Group can negotiate with the IRS to help you obtain CNC status, and we’ll continue monitoring your account to ensure the IRS doesn’t take other actions that could hinder you or your business from staying afloat.