Currently not collectible Status (hardship) 8/21/04
- Collection Options:
- extension up to 120 days to pay taxes in full
- currently not collectible (hardship) status – delay collection until financial condition improves
- installment payments
- expiration of Statute of limitations
- offer in compromise – settle for less than full payment
- See also: collection standards
- financial Information forms
- collection due process hearing right
- IRS Taxpayer Advocate Service (TAS)
- IRS Form 911 – Request for Taxpayer Advocate Service Assistance/ hardship relief
- Low Income Taxpayer Clinic (LITC)
- determining the correct tax
- audits / record keeping
- IRS correspondence audits
- notice of deficiency
- Tax Court
- what if you haven't filed returns
- trust fund recovery penalty
- what if you can't pay your taxes
- what if my spouse owes taxes but I don't
- can I really settle for pennies on the dollar ?
- innocent spouse relief
- injured spouse relief
- tax liens & levies
- subordination of lien
- can the IRS take my house
- abatement of penalties
- discharge of property from lien
- subordination of IRS lien, e.g., to refinancing
- bankruptcy doesn't remove a tax lien even after the tax is discharged
- trust fund recovery (responsible person) penalty
- private party (non-IRS) debt collectors
- tenancy by the entirety protections US v. Craft
The IRS will "request" that you provide it with financial information and compare this information with the IRS collection standards. If you fail to respond the IRS will likely "encourage" you to respond by pursuing enforced collection.
If your financial information form indicates that your household cash flow available to live on does not exceed your "reasonable and necessary living expenses" (as determined by the IRS), the IRS will place you in "currently not collectible" (CNC) or "uncollectible" status. No payments are required and the IRS will not use enforced collection, e.g., levy your bank account or garnish your wages, BUT may file a tax lien.
Being placed in uncollectible status does NOT resolve your tax problem
The tax is still owed and interest and penalties continue to apply.
Uncollectible status is NOT (necessarily) permanent
The IRS may contact you (typically every two years) to update your financial information and see if you are able to pay the tax or enter into an installment agreement. If your financial status has not improved such as to indicate a monthly payment ability you can remain in uncollectible status.
If you do not file a return or pay taxes incurred after being placed in uncollectible status the IRS will take you out of uncollectible status and may use enforced collection.
If you remain in uncollectible status until the statute of limitations expires, the taxes will no longer be owed.