Currently Non-collectible Status Attorney In Chicago, Illinois

Currently Not Collectible (CNC) status with the IRS is a temporary designation that indicates a taxpayer is facing financial hardship, and the IRS has determined that the taxpayer cannot currently afford to pay their tax debt. When a taxpayer is placed in Currently Not Collectible status, the IRS temporarily suspends its collection efforts, providing the taxpayer with some relief.

Key features of Currently Not Collectible status include:

Financial Hardship Determination: The IRS reviews the taxpayer's financial situation, including income, expenses, assets, and liabilities, to determine that the individual is experiencing financial hardship and cannot afford to make payments toward the tax debt.

Temporary Suspension of Collections: While in Currently Not Collectible status, the IRS temporarily halts collection activities, such as wage garnishments, bank levies, and property liens.

Review of Financial Situation: The IRS periodically reviews the taxpayer's financial situation. If the taxpayer's financial condition improves, the IRS may reconsider the taxpayer's ability to pay and resume collection efforts.

Accrual of Interest and Penalties: Although collections are temporarily suspended, interest and penalties continue to accrue on the unpaid tax debt. It's important to note that the temporary relief does not eliminate the overall tax liability.

Notification to Credit Reporting Agencies: The IRS may notify credit reporting agencies about the taxpayer's Currently Not Collectible status, which could impact the individual's credit score.

Annual Reporting Requirement: Taxpayers in Currently Not Collectible status are typically required to file their tax returns on time. Failure to do so could jeopardize their CNC status.

Reassessment of Ability to Pay: The IRS may periodically reassess the taxpayer's ability to pay, and if the taxpayer's financial situation changes, the IRS may request updated financial information.