Currently Not Collectible

If you are unable to pay your tax balance owed to the IRS, and there is no way for the IRS to collect the money you owe through tax resolution, you can file for “Currently not Collectible” status.

This “Currently not Collectible” means that the IRS will not be able to collect any taxes you owe or charge penalty fees if:

• • • • Your wages barely cover your living expenses so there is no income the IRS can garnish.
      • You have no assets that the IRS can levy. Remember, the IRS can not seize or levy assets that you own if you have less than 20% equity in the item.
      • It helps if you have nothing to give the IRS for it can help with your tax balance owed. If your account is deemed to be uncollectible, the IRS will halt the collection process until your financial situation improves and a better tax resolution option becomes available. Interest and penalties will continue to grow and you will continually have to prove each year that you are still unable to pay your tax balance.

If your tax statements show that your financial situation has improved enough, the IRS will start the collection process once again.  However, if the ten year statute of limitations expires while you are still in the “Currently not Collectible” status, your tax balance will become permanently not collectible and no tax resolution or payment will be needed.