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Could currently not collectible status help your tax issues?

On Behalf of | Feb 9, 2021 | IRS Issues

During times of financial struggle, it can feel as if everything is adding up all at once. You may have been trying to get your money matters in order for a while, but now that tax season is here, you anticipate only having another burden added to your current difficulties. It may seem like your financial issues will never end.

Before you begin to feel completely out of hope, you may want to look into your options deferring tax payments to the IRS. For some Georgia residents, applying for “currently not collectible” status could help them delay the collection of the owed tax balance in hopes of being able to make their payments at a later time.

Is CNC the answer?

Though CNC status may seem like the answer to your problem, there are details about this possible option that you need to keep in mind. For example, the IRS must approve a taxpayer for this status. Typically, the IRS will review your information, and if the agency decides that you do not have the means to pay your taxes, it will hold off on trying to collect the debt, which includes not garnishing wages or placing levies on your accounts.

However, even if you receive CNC status, it does not mean that your tax debt goes away, and it does not mean that you are free from accumulating interest and fees for late payments. In fact, the longer it takes you to pay your debt, the more fees and interest will accrue. As a result, this option could help you keep the worst of the consequences for late payments at bay, but it does not completely rid you of all possible repercussions.

How can you apply?

The IRS does not freely offer CNC status to taxpayers who are struggling. If interested in this option, you will need to contact the IRS and request this assistance. You will also need to provide information about your income, expenses, transportation and utilities so that the IRS can review these details to determine whether you qualify for CNC status.

Even if the IRS does not deem you qualified for CNC status, you may be able to qualify for other relief or deferment options. As a result, you may want to thoroughly explore your options and address your tax debt as efficiently as possible.