Finance

Understanding How Current Not-Collectible Status Works

People who need to deal with tax debt can resort to many things to make the matter less stressful and more manageable. One of which is applying for currently non-collectible status. How to get currently not collectible status? What benefit will it bring?

Currently Not Collectible Status

It gives you time to get back on your feet and come up with the most effective ways to pay off the IRS without the immediate need for collections activity. Well, it does not vanish your tax debt because you will still need to pay past due tax and the balance will accumulate interest as well as penalties. The IRS will hold any tax refunds you are entitled to in the coming years until you are able to settle all of your tax balances. The process is called “refund offset.”

What Are The Requirements For Currently Not Collectible Status?

You will need to prove to the IRS that you are really having a hard time paying off your taxes. However, you must meet the following requirements:

  • Your income is less than $84,000/year.
  • Your living expenses meet the IRS guidelines.
  • There are a few years left in the IRS’s 10-year statute of limitation in collecting tax debt.
  • At the end of every month, you have little to no money left after deducting all living expenses.
  • You only receive income from welfare benefits, social security benefits, or unemployment benefits.
  • You don’t have any income sources.

If you want to know all your available options, it would be a big help if you were to enlist the help of a tax professional. That way, you will be able to know if you are a good candidate for the currently not collectible status. The tax professional will calculate your monthly payables needed to make installment agreements.

Related Articles

Back to top button