Many taxpayers are unable to pay their tax debt for a variety of reasons including simply not having the money to do so. Currently Non-Collectible Tax Status (or CNC) may be a potential solution for individuals facing such a situation. The IRS places the accounts of such taxpayers in CNC status if they can prove that clearing the unpaid taxes will lead to “economic hardship”. The onus of proving this to the IRS, however, is on the taxpayer, and the IRS will not go ahead and flag an account as CNC, unless requested.
Reasons for Placing an Account in CNC
While “economic hardship” is one of the primary reasons, there are certain other reasons for which the IRS may place an account in Currently Non-Collectible status. Here are some of the other reasons the IRS may place an account in CNC status:
- Inability to track or locate the taxpayer
- Inability to collect from taxpayers as they reside in a foreign country
- A corporation liquidated in bankruptcy
- Death of the taxpayer and a very low possibility of collection from their estate
Requesting IRS Non-Collectable Status
The IRS grants Currently Non-Collectible status only to qualified taxpayers, thus detailed financial disclosures are generally required. If you are planning to request CNC, the tax professionals at the Law Offices of Nick Nemeth can help you determine whether you meet the criteria and help prepare the extensive list of documents generally required to support the request. If the IRS accepts the request for CNC, the agency stops trying to collect your outstanding tax debt.
Need Experienced Legal Assistance?
Let us help you determine if you meet the requirements for Currently Non-Collectible Status. To schedule a free, no-obligation consultation with one of our attorneys in Dallas, Fort Worth, Houston or anywhere else in Texas, simply call (972) 426-2553 or fill out the Free Case Evaluation Form.