Can’t settle your taxes with the IRS or don’t qualify for bankruptcy relief on your IRS taxes and can’t afford to make monthly payments – Currently Not Collectible Status “CNC” – If you owe taxes and the IRS determines you are unable to pay right now, the IRS may put your collection account on hold through what is referred to as Currently Not Collectible or Hardship Deferral. Currently Not Collectible occurs when the IRS agrees you are unable to repay the debt and if you attempted to do so, it would create an economic hardship on you and your family. Essentially, you are able to receive a break in enforcement of collection actions for a period of time as the IRS temporarily closes your collection case. It should be noted that Penalties and Interest will continue to accrue and grow when on Currently Not Collectible. However, the IRS only has a certain amount of time to collect taxes owed and if a taxpayer can demonstrate continued hardship and remain on Currently Not Collectible status, the Taxes owed, coupled with the Penalties and Interest may fall off if the collection statute expires. This status can be a great option and is one of the many arrows in our quiver the tax professionals use here at Tax Law Center, so call us today so we can explore all your IRS options.
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