Currently Not Collectible (CNC) status can be used to halt IRS tax collections! Check out our video to find out how!
This video covers the basics of Currently not Collectible status. The IRS stops collection activity on tax debts for anyone deemed to be not collectible. However, this status does not prevent the imposition of tax liens.
Firstly, to qualify as Currently not Collectible, the taxpayer must present financial statements to the IRS. The financial statements show available net equity in assets. Secondly, the financial statements also present gross monthly income. Then, the taxpayer subtracts allowable expenses from monthly gross income.
The taxpayer combines net available equity in assets and net monthly income. The sum is the amount that the taxpayer is deemed to be able to pay the government for back taxes. If the number is zero or negative, the taxpayer is not collectible. As a result, IRS collection activities will then cease.
It is important to note the Currently not Collectible status is temporary. The IRS will revisit the taxpayer’s financial position every year or two, to determine if the taxpayer is able to resume making payments on his or her tax bill.
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Founded by Gary Massey, Massey and Company is a boutique CPA firm in Atlanta, Georgia serving the needs of small businesses and their owners.