Updated in April 2023
Qualifying for Currently Not Collectible Status
Overview
Certain taxpayers who are unable to pay their tax debt due to financial hardship may be eligible for Currently Not Collectible Status. This prevents the IRS from garnishing wages or filing bank levies until you’re able to start making payments. Here’s how this taxpayer was able to defer her tax debt.
Situation
When Mary contacted us, she had an open balance of $18,000, even though she had filed all her previous years’ tax returns and was in full compliance. Working out of Baker County, Alabama, Mary didn’t have enough money to start paying off her balance right away.
Solution
Due to Mary’s modest income and net worth, she qualified for Currently Not Collectible Status, which temporarily prevents the IRS from collecting on a taxpayer’s debt.
Result
Since Mary wasn’t missing any tax returns, we were able to resolve her tax problem in just 4 weeks after negotiating with the IRS on her behalf.
Account Diagnosis
- Mary’s account was fully compliant (no unfiled tax returns)
- Open balance of $18,000 from 2020-2021
Program Evaluation
- Given her monthly income and minimal equity, Mary qualified for Currently Not Collectible Status, so she wouldn’t have to pay the IRS for the time being
Submission & Monitoring
- The IRS arranged a hardship-based agreement for Mary following 1 month of negotiations