Sunday, January 20, 2008

Currently Non-Collectible

Another approach to taxpayers who owe the IRS money is what is known as "currently non-collectible" status (CNC). As the name implies, a person placed into this status is deemed unable to make any sort of payments and is not pursued by the IRS. This is not always an easy situation to acquire, as the IRS demands full financial documentation to prove a taxpayer has too little (or no) disposable income. This is probably the closest to tax amnesty anyone can attain realistically, but it is not permanent.


The IRS monitors the earnings of anyone placed into this status. If there is a notable gain in income and it becomes apparent the taxpayer could make payments, they are instantly dropped out of CNC and put back into collections. For a taxpayer whom this happens to, CNC is at least a temporary solution to getting the IRS to back off until finances change and resolution becomes possible. For others, such as retired people on fixed incomes with no likelihood of increasing, this is a blessing because it effectively waives the liability. For others this is a useful tool for riding out statutes. Sometimes an older liability is the highest of the collection, so if one can get at least one high year of liability to fall off, it will make any potential responsibility easier to deal with down the road.

If you are interested in more tax information check out these sites...

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