The Currently Not Collectible status is a temporary IRS designation granted to a business that is unable to pay their tax debt. In order to receive this designation, the business must prove that they do not have sufficient income to make payments toward their tax debt and that their existing assets are too few to be levied to cover the tax balance owed. One a business obtains the Currently Not Collectible status, all collection activity by the IRS is halted until the financial condition of the business improves and the designation is reversed.
The specifics of the Currently Not Collectible Status:
- A business applying for the Currently Not Collectible status must have filed tax returns for all years for which there was a filing requirement.
- In order to remain eligible for the “Currently Not Collectible” status, a business must meet all IRS filing deadlines.
- The Currently Not Collectible status is a temporary status which will be reversed if the economic condition of the business improves.
- Interest will continue to accrue on a tax debt that is classified as Currently Not Collectible.
- The IRS will issue an annual statement of the tax balance owed to any business that has been granted the Currently Not Collectible status.
- A tax debt covered by the Currently Not Collectible status will expire at the end of the ordinary 10 year Statute of Limitations period if the designation has not been reversed.
While obtaining the Currently Not Collectible status can be an effective way of handling an outstanding tax debt, it should be noted that obtaining this designation requires a taxpayer to provide documentation of a significant financial hardship. The tax professionals at Winter & Winter Insurance Services, Inc know the IRS requirements for obtaining the Currently Not Collectible status and will only recommend this tax settlement option to a business client when they determine that it is the best tax debt resolution option available. Once that determination has been made, they will help the client to document the necessary acceptance criteria and will represent them before the IRS until the application is accepted and the process is complete.
To find out more about our business tax relief services, call us today at (866) 254-2996to speak with a licensed tax professional or fill out our online consultation request to receive a free, no obligation consultation.