Currently Non Collectible Status
Currently Non-Collectible Status and exactly what it means.
This is the page that the IRS does not want you to see.
You’re Broke!! They cannot get blood from a stone! You don’t have any money and the IRS can not get something from you that you do not have. Easy!
By being broke, the IRS will be required by law to put you on a Currently Non-Collectible Status. Broke means just that. You literally have nothing to your name. No house or no equity in your house, no savings, no financial investments and not much money from your work or retirement. This is usually great for a year or two and then the IRS will re-evaluate from time to time. They have 10 years and if you remain in CNC for that time, the IRS has to forgive your whole financial obligation amount. ALL OF IT !!
So how does this Currently Not Collectible program work?
An individual may be thought about to be Currently Not Collectible if he satisfies the following:
If he doesn’t have any possessions, for the IRS to levy taxes.
If he does not have a stable income or indicates to pay the taxes owed.
If the income of the tax payer is less than the minimum that is needed to meet his fundamental living expenditures.
As soon as a person is thought about as Currently Not Collectible, all the taxes levied on him get briefly suspended. Even if a person is thought about to be Currently Not Collectible, she or he is still responsible to pay the cash owed and the interest accrued.
The financial status of Currently Not Collectible person is monitored, so that he can return to pay taxes as soon as he returns on track. This is done once in a year, and the IRS also demands the tax payer to send out a copy of his income tax return so that they can compare and see that everything matches. This is the reason that the returns have to be precise with no errors in them.
But the story is not over yet. There is yet another choice for the tax payers to be preferred by the IRS. If the person remains to have really less income and to be in the Currently Not Collectible status for a duration of 10 years, the IRS is liable to remove all the taxes he owes.
In other words, the tax payer doesn’t have to pay any taxes or penalties that had been imposed on him so far.
So if this is actually your scenario, being stated Currently Non-Collectible is a wonderful alternative for some home owner. If you are getting near the time that the statute of constraints runs out, your Revenue Officer might get more aggressive and aim to get you to sign something. Please do not be deceived by this.