No Money to Pay Taxes or to Keep Paying Back Taxes —
You Can Stop IRS Collection of Tax Debt if You Qualify
If your economic circumstances have deteriorated and you have too little money left after you pay for the essentials of living: rent, utilities, groceries, etc., you maybe in the best situation to qualify as Currently Not Collectible (CNC) – which means that the IRS will stop trying to collect back tax debt from you, whether or not you have a payment agreement with them. Getting CNC status will cease collection activity and give you some breathing room, but it only defers payment, it won’t make your tax debt go away, and it will not stop interest and penalties from growing on the unpaid tax debt. You should consult with BestTaxPro to determine whether applying to the IRS for CNC status will help you or hurt you with your financial situation.
To qualify as Currently Not Collectible, the IRS will use a formula to assure that the reason that there is too little money left after you pay for living essentials, is that YOU mean the same thing by “living essentials” as the IRS does. If a taxpayer’s expenses are inflated, the argument won’t fly. The IRS uses published standards for how much a taxpayer is allowed to pay for rent, utilities, groceries, commuting, etc. that are adjusted for factors like family size, marital status and region of residence. Nothing is simple under the tax law and it would be prudent to get a sense from a qualified tax professional whether you qualify as Currently Not Collectible before you try to make this assertion to the IRS. Figuring out whether you qualify for CNC, and often more importantly for those whose economic circumstances are changeable, figuring out whether you are better off economically to seek CNC status, is something that BestTaxPro can help you with.