Currently Not Collectible

If you do not have the means to pay your tax debt, and the IRS would not be able to collect on your tax debt through traditional methods of tax resolution, you can enter Currently Not Collectible status.

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.

  • Personal income covers only your essential living costs with no leftover money that the IRS can take
  • Lack of valuable assets subject to levying
  • Note that the IRS is not allowed to seize an asset that has less than 20 percent equity in the item or if the expense involved in seizing and selling is higher than the value of the equity

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. 

Why Five Stone?

  • The highest success rate in the industry
  • We immediately stop aggressive collection activities
  • Client Savings of $130+ million
  • Most clients settle with the IRS for less than $1,500
  • Aggressive taxpayer advocates
  • 33% of profits donated to charities and non-profit organizations
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