The status of Currently Not Collectible means precisely what you think. The IRS is unable to collect on your original tax liability or on assessed penalty amounts under the following circumstances.
Although the idea of having nothing worth taking is not the ideal position to be in, it can help with dealing with the IRS. If your account is considered uncollectible, collection activities by the IRS will be halted until your financial situation gets better and another form of tax resolution is more attainable. While the IRS will be unable to collect against you, interest and penalties will continue to accrue on your tax debt.
You will also have to provide yearly financial statements to demonstrate that you’re still currently unable to make payment. If the yearly financial statements indicate that your situation has significantly improved, the IRS collection process will pick back up. However, if the 10-year statute of limitations for back taxes runs out while you’re in Currently Not Collectible status, the tax debt will be forever recognized as not collectible and your tax debt will be resolved.
Let Five Stone Give You Back Your Peace of Mind!Our team will get you on the road to financial freedom.