IRS What is? Currently Not Collectible status, and how can it help me with my past due taxes?

Currently not Collectible or non-collectible status allows you to suspend collection activity for a duration of time. It is usually used for a temporary loss of income or hardship. However, it can possibly be used for certain taxpayers who fit a financial profile. For example, let’s say you are on a fixed income like social security and a payment plan is not affordable for you. The IRS could place you in the non-collectible status for the duration of you collection statue period commonly known as CSED date.

Remember the IRS gives themselves ten years to collect on a taxpayer(s) tax debt.

Things to know about the program:

• Any new additional tax debt you generate will kick you out of the protective status.

• A tax lien will be filed if you owe over $10,000 in back taxes. ☹

• Monitoring: The IRS will monitor to see if you can stay in the protective status or be considered collectible. This usually means you have an increased income annual of more than 20% give or take.

• It could extend your CSED date of expiration.

An important thing to remember is a tax lien no longer shows up on your credit report and usually will not impact you from getting new credit. However, if you do own real estate, it could complicate a purchase and or selling of a home. Remember the goal of the IRS is to collect tax debt as soon as possible.

In my experience the top reasons why most taxpayers fall into owing the IRS are not having enough federal withholding taken out of their paychecks, this also includes social security and retirement. Many self-employed taxpayers are either unaware of the taxes they are responsible to pay or ignore the fact they are responsible to pay in estimated tax payments. When you work for yourself as a owner of company or are an independent contractor you are supposed to pay in your own federal taxes, these are called Estimated Tax Payments. I will discuss these in more detail in another blog post.

If you have questions or need help understanding your options, please give me a call/text. We hope you enjoyed this brief blog, tell next week! 904-274-9503 text/call. Email: info@pegaustaxpros.com Texting is preferred.

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