There are steps that need to take place before the IRS will deem you in a non-collectible status. You will need to prove that you currently face a hardship and that you would not be able to pay towards the amount of taxes you owe. This means that the IRS will ask for copies of bank statements, income reports, W-2s, expense sheets, and any other forms that will prove you cannot pay the liability. Often, you will even need to show the IRS that you do not have any assets to sell and you cannot obtain a loan. Talk with us about the process for currently non-collectible status if you’re in CA.

If you are able to do this and the IRS grants the non-collectible status, you will not have to worry about the IRS chasing you down to pay them. You will not experience any collection activity, but do note that your debt will continue to grow as interest and penalties will continue to accrue on the account.

It is important to note that the IRS may require you to submit reports annually to continue to verify your status. You should always speak with an experienced tax expert in CA before choosing to be placed in currently non-collectible status. You and your professionals may be able to negotiate a payment plan with the IRS that will work for you and prevent you from continuing to collect penalties and interest.