What does the Internal Revenue Service mean when they say you are “Currently Non-Collectible”?

Have you ever owed taxes and wondered if there was a way to get them back from the IRS? The IRS, however, does offer a way out of this tax jam, provided you meet certain requirements. They are commonly referred to as “Current Not Collectibles.”

But now the question is, how does this Currently Not Collectible system work, exactly?

Individuals who meet all of the following conditions may be deemed Currently Not Collectible at this time.

The IRS could still come after him for payment even if he has nothing to give in that case.

In the event that he does not have a stable income or access to the funds necessary to settle the tax debt.

A tax penalty applies if a taxpayer’s income is below the amount considered adequate to cover their basic living costs.

All taxes assessed against a person are put on hold while the status of “Currently Not Collectible” is determined. A debtor who is determined to be Currently Not Collectible still has the responsibility to repay the principal amount plus interest. Learn more henceforth in detail below.

To make sure that a person who is Currently Not Collectible will be able to resume paying taxes once his life gets back on track, his tax situation is monitored. This is done annually, and the tax payer must also submit a copy of his tax returns to the IRS so that they can cross-reference and verify the data. For this reason, it is crucial that the returns contain no inaccuracies.

But the story isn’t over just yet. The Internal Revenue Service is giving taxpayers yet another chance to curry favour (IRS). The Internal Revenue Service (IRS) may be required to forgive all of the back taxes owed by the individual if they continue to have a very low income and remain in the Currently Not Collectible status for a period of ten years.

What Should You Do If You Are No Longer Considered Collectible?

Remember that if the IRS does grant you tax-exempt status, that does not mean your tax bill goes away. Legal actions to collect the debt, such as wage garnishments, bank levies, and asset seizures, will continue despite your bankruptcy status, but will be put on hold temporarily.