Taxpayers who are unable to pay anything toward their tax debt amount may be eligible to be entered into the IRS program Currently Not Collectible status. This program allows taxpayers to have a stay of collections, while not being required to pay the tax liability due to their current financial situation.
“Currently Not Collectible status allows our clients the time to regain their financial footing while also accepting the responsibility of their tax debt. Through this program Tax Defense Network helps them avoid IRS collection actions, and gives them the peace of mind they need to go back to their daily lives knowing that the IRS will no longer continue collections practices,” Staff Attorney Eric Roffer says.
While taxpayers may find that their own financial condition is acceptable for Currently Not Collectible, there are qualifications that they must meet in order to be approved. There are standard requirements that taxpayers can use to determine if their situation may be eligible for the program, such as:
- The taxpayer is unemployed or on a fixed income.
- The taxpayer is sick or seriously ill and unable to work.
- The taxpayer is unable to meet all of their current necessary monthly expenses with their current income.
- The taxpayer has little to no assets or equity that could serve to repay the tax debt.
“A taxpayer has to be able to prove they are unable to pay their necessary living expenses and a minimal payment on their tax debt amount to be considered for this program. Tax Defense Network’s team of tax professionals performs a thorough financial review to determine if our client qualifies before we apply. Once we are confident our client meets the qualifications of the status, we submit the necessary documentation to the IRS in order to finalize the resolution,” Eric Roffer explains.
Taxpayers will be required to disclose all financial documents to the IRS to determine their monthly income, assets with available equity, possible lines of credit and more. These factors will help the IRS conclude whether a taxpayer is able to afford to pay a minimum monthly payment on their tax liability.
Currently Not Collectible status is not a permanent solution. The IRS will periodically review the taxpayer’s financial situation to determine if any improvement allows a payment of tax debt until either the financial circumstances of the taxpayer changes, or the Statute of Limitations on the debt expires.
Tax Defense Network is a national tax relief company with a team of tax professionals who have over 35 years of combined tax debt experience. Tax Defense Network has resolved over $120 million in client tax debts, including small-business and individual tax issues, while maintaining an A+ rating with the Better Business Bureau.