I am a tax attorney in New Haven, Connecticut that helps taxpayers struggling with tax debt all over the country. Dealing with tax matters can feel overwhelming, for any taxpayer. Whether its dealing with mounting debts or the looming threat of IRS enforcement actions the financial strain can be quite daunting. Fortunately there are options to help individuals facing challenges one being the option to acquire Uncollectible Status, also known as Currently Not Collectible (CNC) status from the IRS.
Uncollectible status offers a relief for taxpayers experiencing hardship and unable to fulfill their tax obligations. When granted status the IRS puts a pause on collection activities providing some respite from asset or income levies. Despite the tax debt remaining in place there are advantages to securing uncollectible status that make it a viable solution for those grappling with financial struggles.
Primarily obtaining status provides time. By stopping enforcement actions taxpayers can take a moment to evaluate their circumstances and explore ways to address their tax debt. This becomes especially beneficial when nearing the collection statute expiration date (CSED). Allowing the statute to run its course maintains the taxpayers chance of outlasting the IRSs collection attempts.
Additionally uncollectible status may serve as a choice for individuals who do not qualify for collection alternatives like an Offer-in-Compromise (OIC).
For example people who have equity in assets they cannot access may find it hard to qualify for an OIC because of rules set by the IRS. By choosing to be considered uncollectible taxpayers can buy time, avoid levies by the IRS, and have a professional help them sort out options for an OIC.
Moreover being labeled as uncollectible provides a safety net for taxpayers dealing with issues of meeting tax obligations. For those who can't file tax returns or fix compliance problems quickly getting CNC status shields them from seizure actions while they try to fix their filing mistakes. This breathing room allows taxpayers to catch up on returns ensure compliance and then look into long term solutions for handling their tax debts.
Additionally being marked as uncollectible can be a move in handling tax compliance difficulties. For individuals struggling to pay estimated taxes or meet responsibilities obtaining CNC status offers a break from collection enforcement so they can focus on meeting requirements for the following tax year.
Despite its advantages, opting for CNC status may create some issues.
Taxpayers who own real estate might come under closer examination by the IRS, which could result in the IRS taking action to seize and sell assets in order to settle tax debts. Therefore it's important for taxpayers to carefully evaluate their situation and consider the implications of seeking CNC status especially with regards to their assets.
In summary being classified as Uncollectible by the IRS can be an option for taxpayers facing difficulties and tax obligations. This status offers a break from enforcement actions, allows time to address compliance issues giving individuals the opportunity to handle their tax challenges strategically.
If you or someone you know needs help resolving an IRS tax debt, please contact me at (203) 285-8545 or by email at egreen@gs-lawfirm.com.
1 Audubon Street, 3rd Floor
New Haven, CT 06511
Ph. (203) 285-8545
Eric Green is one of the managing partners of Green & Sklarz LLC where he focuses his practice on civil and criminal taxpayer representation. Eric is a nationally renowned tax expert and author/commentator of IRS civil and criminal tax matters. Having lectured to more than 70,000 practitioners on civil and criminal tax topics, he is one of the nation’s best known lecturers in continuing professional tax education. Eric is the host of the weekly Tax Rep Network podcast, founder of Tax Rep Network and the author of the Insider’s Guides to IRS Representation, including Resolving Tax Debts.
Comments(2)