Friday, October 2, 2009

IRS Settlements: Currently Not Collectible

There are several ways to settle with and/or stop the IRS from issuing garnishments and levies. One of the more popular strategies is applying for 'Currently Not Collectible Status' ('CNC')

Washington Residents can file for Currently Not Collectible status if the taxpayer has no ability to pay his or her tax debts. The IRS can declare a taxpayer "currently not collectible," after receipt of evidence that a taxpayer has no ability to pay their debts. Such evidence is usually obtained from the taxpayer on IRS Form 433-F, (Collection Information Statement).

Process:

A taxpayer can request "currently not collectible" status by submitting Form 433-F to an IRS Revenue Officer or the IRS Automated Collection System unit.
Once the IRS declares a taxpayer currently not collectible, the IRS must stop all collection activities, including levies and garnishments. The IRS must send an annual statement to the taxpayer stating the amount of tax still owed. This annual statement is not a bill.

10-Year Statutory Period to Collect still runs!

While in not collectible status, the 10-year statute of limitations on tax debt collection is still running. If the IRS cannot collect the tax within the 10-year statutory period, then the tax debts will expire.

Being declared "currently not collectible" is one of five ways to get out of tax debt. A taxpayer facing significant financial hardships or tax debt burdens should seek the advice of a Kirkland Tax Attorney specializing in tax debts.

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