Establishing a Currently Not Collectible Status
Paying taxes is something that all of us have to do, but is also something that many people may fall behind on. Without taxes, the country would not be able to run efficiently, and while unpleasant, taxes are an essential part of American life. Because taxes are so essential, there are also some fairly serious penalties for the people that do not pay their taxes, such as difficulty being released from a credit freeze. If you are facing tax debt, there are a few options that you can use in order to avoid large fines and penalties like levies. The following is a basic explanation of one of the more effective ways to deal with your tax debt.
Currently Not Collectible Status
There are certain ways that you can avoid penalties from the IRS involving your tax debt. One of the main options for people that are trying to avoid penalties is to establish what is commonly referred to as a currently not collectible status. If you are eligible for this kind of tax status, the IRS will not be able to open any levies against you and will not be able to garnish your wages or impose any other kinds of penalties. However, in order to be eligible for this kind of status, you will need to meet certain criteria.
In order to establish a currently not collectible status, you will need to show the IRS that you do not have the ability to pay the tax debt that you owe. In order to do this, people will have to establish that they do not have income or assets that can be taken by the IRS in a levy. If you meet the criteria that make you eligible for currently not collectible status, you should also be aware that the IRS will continue to monitor your activity, and they will seize your assets if you ever make enough to be removed from currently not collectible status.
Statute of Limitations
People that are trying to establish a currently not collectible status will also want to be aware of the fact that the IRS operates under certain rules and one of those rules is called the statute of limitations. This statute states that the IRS is only able to collect tax debt within a ten year period of time. If you manage to maintain your currently not collectible status for that ten year period, the IRS will not be able to collect the money, and your debt will be forgiven.
Because a currently not collectible status means that the IRS will have a lot more difficulty getting what they are owed, they are going to be very particular when it comes to the individuals that they grant the status to. If you feel that you should be eligible for this status but are having a hard time convincing the IRS, you may want to hire a tax debt professional. These professionals have helped a lot of people deal with their tax debt, and establishing a currently not collectible status is going to be much easier if you have a bit of extra help.
Establishing a currently not collectible status may be a good option for people that are having a hard time paying back their taxes and are looking for ways to avoid levies and other problems. The best option is to avoid tax debt in the first place, and establishing a payment plan with the IRS if you do run into problems. But if you do not have the ability to pay back your taxes, a currently not collectible status may be the best option.
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