Currently Non-Collectible Status and what it means. (CNC)
This is the page that the IRS does not desire you to see.
You’re Broke!! They can’t get blood from a stone! You don’t have any cash and the IRS can not get something from you that you do not have. Easy!
By being broke, the IRS will be required by law to put you on a Currently Non-Collectible Status. Broke suggests simply that. You actually have absolutely nothing to your name. No house or no equity in your house, no savings, no investments and very little money from your work or retirement. This is generally great for a year or 2 and then the IRS will re-evaluate from time to time. They have ten years and if you continue to be in CNC for that time, the IRS has to forgive your entire financial obligation quantity. ALL OF IT !!
So how does this Currently Not Collectible program work?
An individual might be considered to be Currently Not Collectible if they fulfill the following:
- Doesn’t have any assets, for the IRS to impose taxes.
- Doesn’t have a steady earnings or implies to pay the taxes owed.
- If the income of the tax payer is less than the minimum that is needed to meet his basic living expenses.
When an individual is thought about as Currently Not Collectible, all the taxes imposed on him get temporarily suspended. Even if a person is considered to be Currently Not Collectible, she or he is still accountable to pay the cash owed and the interest accumulated.
The monetary status of Currently Not Collectible individual is kept an eye on, so that he can return to pay taxes as soon as he gets back on track. This is done as soon as in a year, and the IRS likewise requires the tax payer to send a copy of his tax returns so that they can compare and see that everything matches. This is the reason that the returns have to be accurate without any mistakes in them.
But the story is not over yet. There is yet another option for the tax payers to be preferred by the IRS. If the individual continues to have extremely less earnings and to be in the Currently Not Collectible status for a period of 10 years, the IRS is accountable to eliminate all the taxes he owes.
Simply puts, the tax payer doesn’t have to pay any taxes or charges that had actually been levied on him so far.
So if this is actually your circumstance, being declared Currently Non-Collectible is a fantastic choice for some home owner. If you are getting near the time that the statute of restrictions goes out, your Revenue Officer may get more aggressive and aim to get you to sign something. Please do not be tricked by this.
To see if you qualify for currently non-collectible status for the IRS, click on your state and speak with one of our tax professionals to get all your answers.