Currently Non Collectible Status
So how does this Currently Not Collectible program work?
Currently Non-Collectible Status and exactly what it suggests.
This is the page that the IRS does not want you to see.
You’re Broke!! They cannot get blood from a stone! You don’t have any cash and the IRS can not get something from you that you do not have. Simple!
By being broke, the IRS will be forced by law to put you on a Currently Non-Collectible Status. Broke indicates simply that. You literally have nothing to your name. No home or no equity in your home, no savings, no investments and not much cash from your employment or retirement. This is generally great for a year or 2 then the IRS will re-evaluate from time to time. They have 10 years and if you stay in CNC for that time, the IRS needs to forgive your whole financial obligation quantity. ALL OF IT !!
A person might be considered to be Currently Not Collectible if he satisfies the following:
If he does not have any possessions, for the IRS to levy taxes.
If he doesn’t have a stable income or implies to pay the taxes owed.
If the income of the tax payer is less than the minimum that is needed to meet his standard living expenditures.
Once a person is considered as Currently Not Collectible, all the taxes imposed on him get temporarily suspended. Even if a person is considered to be Currently Not Collectible, he or she is still accountable to pay the cash owed and the interest accumulated.
The monetary status of Currently Not Collectible person is kept an eye on, so that he can return to pay taxes when he gets back on track. This is done when in a year, and the IRS likewise demands the tax payer to send out a copy of his income tax return so that they can compare and see that everything matches. This is the reason why the returns need to be accurate without any mistakes in them.
However the story is not over yet. There is yet another choice for the tax payers to be preferred by the IRS. If the person continues to have really less income and to be in the Currently Not Collectible status for a duration of 10 years, the IRS is accountable to get rid of all the taxes he owes.
In other words, the tax payer doesn’t have to pay any taxes or penalties that had actually been imposed on him up until now.
So if this is truly your circumstance, being declared Currently Non-Collectible is a great option for some home owner. If you are getting near the time that the statute of limitations goes out, your Revenue Officer might get more aggressive and attempt to get you to sign something. Please do not be tricked by this.