Currently Not Collectible

Currently Not Collectible - How does it work?

What if I can’t pay anything?

If your income is not enough to pay your bills and paying the IRS would be a hardship to you.

  • You are sick and unable to work or you become unemployed.
  • You are receiving disability and don’t have the ability to pay the IRS.
  • If you have no substantial assets or equity to pay the IRS.

If the IRS agrees that you can’t pay, it may suspend collection action and classify your account as currently not collectible.

The next step is to determine if you are able to pay all or part of the tax you owe. If it is determined that you cannot pay any of your tax debt due to an economic hardship the IRS may temporarily delay collection until your financial condition improves. To obtain this classification the IRS would have to be informed of your request and substantiate your claim with proper documentation.

Will the tax debt go away when I am classified as “Currently Not Collectible?

Being currently not collectible does not mean the debt goes away. It means that the IRS has determined you cannot afford to pay the debt at this time. Penalties and interest will continue to be added to the debt until either you pay off the balance or the statue of limitation expires which is 10 years from the date of assessment.

 

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