Currently Non-Collectible Status and exactly what it implies.
This is the page that the IRS does not want you to see.
You're Broke!! They can't get blood from a stone! You don't have any money and the IRS can not get something from you that you do not have. Simple!
By being broke, the IRS will be required by law to put you on a Currently Non-Collectible Status. Broke indicates just that. You literally have absolutely nothing to your name. No house or no equity in your house, no savings, no financial investments and very little cash from your employment or retirement. This is generally great for a year or 2 then the IRS will re-evaluate from time to time. They have 10 years and if you stay in CNC for that time, the IRS needs to forgive your whole debt amount. ALL OF IT !!
An individual may be considered to be Currently Not Collectible if he or she satisfies the following:
If he does not have any assets, for the IRS to levy taxes.
If he doesn't have a steady earnings or means to pay the taxes owed.
If the income of the tax payer is less than the minimum that is needed to meet his fundamental living expenses.
As soon as an individual is considered as Currently Not Collectible, all the taxes levied on him get temporarily suspended. Even if an individual is thought about to be Currently Not Collectible, he or she is still accountable to pay the cash owed and the interest accrued.
The financial status of Currently Not Collectible individual is kept an eye on, so that he can get back to pay taxes once he gets back on track. This is done when in a year, and the IRS likewise demands the tax payer to send a copy of his income tax return so that they can compare and see that everything matches. This is the factor why the returns need to be precise with no errors in them.
However the story is not over yet. There is yet another choice for the tax payers to be favored by the IRS. If the individual remains to have very less income and to be in the Currently Not Collectible status for a period of 10 years, the IRS is accountable to get rid of all the taxes he owes.
Simply puts, the tax payer doesn't need to pay any taxes or charges that had actually been imposed on him up until now.
So if this is truly your scenario, being declared Currently Non-Collectible is a fantastic option for some individuals. If you are getting close to the time that the statute of restrictions goes out, your Revenue Officer may get more aggressive and attempt to get you to sign something. Please do not be fooled by this.