Currently Not Collectible
A “Currently Not Collectible status” (or “significant hardship case”) is for people who have no means to pay the back taxes to the IRS. With minimal or no source of income and certain qualifications, you can declare your back taxes as currently not collectible and suspend collection activities for 12 months or more.
However, it isn’t easy to prove that you qualify for this status. You must prove that you have no assets, no job, or very little income and you survive mostly through welfare or the help of others. If eligible, tax professionals at James M. Cha, CPA & Company can help you qualify for a CNC status. Once you can prove this status, all collection activities will come to a stop for a certain period of time.
If you attempt and fail to prove a CNC status, the IRS or state will demand that you make payments in a monthly payment plan or satisfy the back taxes through your assets.
Once your account is in a CNC status, the government will typically stop coming after your assets by liens or levies, and will not garnish your wages. However, this does not ensure that the IRS or state will not come after you forever. Penalties and interest can still grow while you’re in the CNC status.
A CNC status will not last a lifetime. The IRS can still reopen your case at any time, especially if you owe additional taxes, sell assets or increase your income.
It is important to consider if a CNC status is the most suitable for your situation.
The tax professionals at James M. Cha, CPA & Company are the experts at analyzing if it is the best resolution option for you based on your financial situation and will help you qualify for this status.