Miami Currently Not Collectible Status Attorney
Many of those who owe taxes to the IRS, but who do not pay them on time, do not do so out of recalcitrance, but because they are in financial straits. Fortunately, when taxpayers owe the IRS, but cannot pay the full amount in addition to their basic living expenses, the IRS will often label their account as having Currently Not Collectible (CNC) status. While an account has CNC status, the IRS will usually refrain from attempting collection through levies and liens. The agency will, however, continue to assess interest and penalties to the account and keep the taxpayer’s refunds to apply to the debt.
To receive CNC status, a taxpayer must prove that it qualifies for the program, which can be a difficult endeavor, so if you owe the IRS taxes, but are unable to pay them due to your financial situation, you should consider consulting with an experienced Miami Currently Not Collectible status attorney who can help you file overdue returns, review your income and expenses, and provide the IRS with the necessary financial information.
Requesting Currently Not Collectible Status
The IRS will only give an account CNC status if a taxpayer fulfills certain responsibilities, including:
- Filing all past due tax returns;
- Collecting financial documentation, including bank statements from the last three months, a list of assets and their market value, proof of income and monthly living expenses, and proof of payment for out-of-pocket medical costs;
- Filling out a Financial Statement, which requires a list of all of the taxpayer’s assets and their estimated market value, as well details about the taxpayer’s income and spending from the past three months;
- Analyzing the Financial Statement to assess monthly income, necessary living expenses, and how much could be remitted to the IRS for tax payments; and
- Submitting the Financial Statement to the IRS.
If, after complying with these requirements, a taxpayer is able to prove that he or she cannot pay what is owed to the IRS and cover their basic living expenses, such as rent, utilities, and groceries, the agency could change an account’s status to CNC, which means that the IRS cannot continue to collect taxes, levy a person’s wages, or seize assets.
How Long Does CNC Status Last?
The amount of time that a person can continue to claim Currently Not Collectible status depends on how much income that person earns and how quickly his or her financial situation improves. Basically, when a taxpayer reaches a certain income level, it will trigger a follow-up review from the IRS, at which point, the IRS will either resume collection activities or extend the taxpayer’s CNC status.
It’s also important to note that the amount of time that the suspension of collection activities is in effect will extend the time that the agency has to seek reimbursement. Furthermore, the IRS won’t stop charging interest and penalties on a person’s account, even if the agency does temporarily stop trying to collect the remaining balance.
Contact Our Miami Legal Team Today
If you are unable to meet your expenses and pay your tax debt to the IRS, you could qualify for Currently Not Collectible status. Please call dedicated Miami tax attorney Ronald Cutler, P.A. at 386-490-9949 to learn more.