by Louis Meeks on November 26, 2014 in Blog
CURRENTLY NOT COLLECTIBLE
Protection Against the IRS Collection Process.
The Internal Revenue Service has the power to collect on your past-due tax liabilities without your knowledge or consent. Once the IRS has given you proper notice of your balance and of your obligation to pay, and the balance is still not paid, they can seize funds in your bank accounts, or even garnish your paycheck! You know that you owe the money, but you’re barely making it between paydays; if any part of your paycheck got taken, you would be in real trouble. Is there any way to stop the IRS from taking that money?
Fortunately, the Internal Revenue Code does provide for protection against involuntary collection on past years’ taxes when the taxpayer is in a hardship financial situation, by determining that the taxpayer is “Currently Not Collectible.” Being “CNC” means that the IRS has determined that you cannot afford to pay your tax debt at the current time. This is determined after an examination of your household assets (including cash on hand, bank accounts, and home equity, among others), income (paychecks, social security, and retirement payments, for example), and allowable expenses (including mortgage or rent payments, car loans, and insurance). Once those values are provided, if the expenses exceed your income, and you have insufficient assets to address the balance, the IRS will deem you Currently Not Collectible, and will cease seeking collection against you.
Being placed into Currently Not Collectible status does not mean that the balances go away, or that you will never have to pay on them ever again. For one, penalties and interest continue to accrue on the tax debt. Further, Currently Not Collectible is only meant to last as long as the taxpayer is in a hardship financial situation. If, at any time beyond the first year of CNC status, the taxpayer’s income becomes greater than the monthly expenses, the CNC protection can be removed, and the collection efforts can recommence.
Being placed into Currently Not Collectible can be a great relief to a taxpayer that is facing a large tax debt that they have no idea or means to address. Finding a tax relief company that can assist you in getting that CNC status is imperative when you are in a hardship situation. The professionals in a tax relief company know the kind of income and expenses that will be considered when the IRS is deciding whether you are able to pay on your tax debt. At Victory Tax Solutions, you will work directly with an experienced tax attorney who can ensure that you qualify for every allowable expense, and give you the best chance for success in getting the relief you need.
Please feel free to call us at any time. Our toll free number is 877-772-0123.
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