If you are in a situation where you do not have the financial resources to pay your tax liabilities in full or in part, an installment agreement or an offer in compromise may not be a viable option. Our team of trained tax attorneys will obtain a determination that places you in a “non-collectible status.” All collection actions will then cease. You will not be pressured to pay your tax bill at this time.
IRS Non-Collectible Status Summary
In most cases, a detailed financial disclosure is required before the IRS will close a collection case as "currently not collectible". Usually, IRS form 433-A or 433-F will be completed. Also required will be documentation that substantiates your income, assets and expenses. While the IRS provides several reasons why an account should be placed in currently not collectible status, the most common is that collection would create an economic hardship. This determination follows the review of the documentation supplied by the taxpayer. Please keep in mind what the taxpayer views as a hardship, the IRS may view as a mere inconvenience.
If the IRS allows a case to be closed as currently non-collectible, the case will generally be re-opened and returned to active collection status if you fail to file a future tax return, accrue a new tax liability, or your financial situation changes enough to allow payments to be made against the back debt.
Please be aware that currently non-collectible tax status is not a permanent solution. The tax is not forgiven, and interest and penalties may continue to accrue.