IRS Currently Not Collectible


What can you do if you can no longer pay your outstanding tax liabilities?

Showalter CPA can help you get a much-needed break from the horrible stress of the IRS on your back by getting you placed on IRS currently not collectible status. This status is only gained after the IRS evaluates your financial situation and determines that you cannot afford to pay off the tax debt in your current situation in full through an installment agreement.


What Happens to You When You Have IRS Currently Not Collectible Status?

When the IRS closes your case and determines you have currently not collectible status, the IRS stops its collection activities immediately. Although, any penalties and interest owed will continue to build on top of your tax debt. If and when your financial situation improves over time, your tax account will be taken off the Currently Not Collectible status which allows the IRS to start collecting the tax debt through either full payment or an installment agreement.


If you are currently in no position to pay your taxes, our experienced and professional tax accountants will work with you to ensure you are placed on IRS currently not collectible status. We will carefully assess your financial situation to ensure you meet the qualifications for an IRS currently not collectible status. We will work with you to show the IRS that you are undergoing sufficient financial hardship. For example, we may need to prove to the IRS that you have no extra income at the end of each month for the IRS to close your case with a finding of currently not collectible.


The Dreaded Letter from the IRS

If you have received a tax notice, IRS letter, audit notice, or other tax correspondence from the IRS, a state agency, or a local agency, it can be difficult to know what to do next. We frequently represent clients with IRS penalties, interest, and taxes due, and we can help you, too. We have worked on items such as IRS Offers in Compromise and Penalty Abatements.


The Tax Help You Need

If you are ready to face your tax problems, we are here for you. We can help you relieve that huge stressful burden, so you feel lighter and free from all that stress. Do not face your tax issues alone. Our trained and certified tax professionals work diligently to find the best outcome we can on your tax issues. Turn to the Showalter CPA Firm, and let us put our tax resolution services to work for you. Call now for more information or to schedule a consultation at (605) 646-3585.


Currently Not Collectible Status with the IRS


If there is absolutely no way for you to pay your tax debt, and no way for the IRS to collect the money owed by the more traditional forms of tax resolution options, you can file for “currently not collectible” status.


“Currently not collectible” means exactly how it sounds. The IRS will not be able to collect any owed taxes or penalty charges if:


  • Your wages cover no more than your necessary living expenses so that there is no amount the IRS can garnish
  • You have no assets worth levying. Remember that the IRS cannot seize an asset if you have less than 20 percent equity in the item or if the expenses involved in seizing and selling it are more than the equity is worth. This makes the IRS seeking another form of tax resolution unlikely.

Just because you have nothing worth the IRS taking from you is not exactly a great position to be in, but it can help in dealing with them. If your account is deemed to be uncollectible, the IRS will stop the collection process until your financial situation improves and another form of tax resolution becomes more realistic. Interest and penalties will continue to build up against you, and you will have to provide financial statements each year to show whether or not you are still currently unable to pay.


The IRS collection process will resume if your financial statements show that your situation has improved enough.


But if the 10-year statute of limitations for back taxes expires while you have currently not collectible status, the tax debt itself will become permanently not collectible and no other form of tax resolution will be needed.


We have the education and experience that you need to put you in the best possible position in negotiating with the IRS. Call us today for a free consultation. 605-646-3585.



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