Currently Not Collectible

Currently not collectible is the IRS’s hardship program. It temporarily removes your account from collections without requiring any payments.

Currently not collectible can be a very attractive resolution. It places a temporary hold on your account protecting you from any collection action such as wage, accounts receivable, or bank levies, without creating an obligation to make payments. However, similar to an offer in compromise, the IRS requires you to show proof of financial hardship in order to qualify for this status. Additionally, there are a couple things to note about currently not collectible.

First, it is temporary, typically only lasting for a period of one to two years but it’s possible for the IRS to review your account earlier. Whenever your account comes up for review you will be required to provide another financial statement. If you are still demonstrating a financial hardship, your status can be renewed but if your situation has improved, the IRS will require you to make other arrangements.

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The second thing to keep in mind is that the IRS is required to file federal tax liens when they place your account in currently not collectible status. If you’ve been in collections for any period of time, it’s likely that you’ve already had a federal tax lien filed against you in which case this stipulation is a moot point. However, for those lucky enough to dodge a federal tax lien and who are looking to keep it that way currently not collectible would not be a good fit.

It’s also important to remember that penalties and interest will continue to accrue while your balances are in currently not collectible. This isn’t necessarily a bad thing in every case though. It really depends on your long-term resolution strategy.

Currently not collectible can be a great resolution in certain situations. Schedule your free consultation today to find out if it could be the right fit for you.

Temporary Collection Relief

Currently Not Collectible

Temporary Stay of Collections – Typically One to Two Years

Requires Financial Statement

Federal Tax Liens will be Filed

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