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.
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.
Don’t get bogged down in the details and eventually lose money by not knowing how to keep business records properly. When you aren’t organized you can end up paying more in taxes than you should.
Get a FREE evaluation to help you resolve your tax debt with the least amount of financial impact to you and your family. Tax problems don’t go away by themselves.