Tax compliance has proven to be a doubting task for most people who have little or no information on the taxation laws and regulations. Most people struggle to pay their taxes to the authority without putting into consideration some aspects of the tax regime that can help them ease the tax burden for some time. Currently not collectible (CNC) tax option is one of the options people struggling to pay their taxes should consider. Currently not collectible tax situation applies when one agrees he/she owes some taxes to the IRS, but they cannot pay the taxes due to your current financial position.
If the IRS is convinced that you cannot be able to pay both his personal expenses and the tax at the same time, your account is placed in currently not collectable status. When your account is in CNC status, the IRS does not engage in any tax collection activities, on your incomes as well as your assets. However, when your account is in CNC status, the IRS charges interest and penalties on your account for late payments and overdue tax. For one’s account to be given currently not collectable status, the IRS request for financial information and assess your income and liquidity of your assets.
Information required while applying for (CNC) status
· Filing of any delinquent returns
· Completion of forms 433-A, 433-F and 433-B
· Businesses are required to submit collection information before making any collection decision
· Documentation to support the submitted collection information
· The IRS continues charging penalties for late payments for your account
When IRS puts your account in CNS status
· Tax refunds are withheld to pay the existing debt
· Even if your account is in CNC status, you can still make voluntary payments
· No levies should be imposed on your income and assets when your account in hardship status.
· The IRS makes regular contact to ensure that your financial status has not changed
If you cannot be able to pay the tax liability in the future, one can contact the Hillhurst Tax Group to represent him to solve the problem. People whose accounts have been put under CNC status have rights that are granted by the constitution. Some of these rights include; the right to be informed, the right to privacy, the right to just and fair taxation, the right to challenge the position of the IRS and to be heard, and the right to representation. Taxpayers are encouraged to seek legal advice if the tax situation is more complex and the IRS is not responding.…What Happens If You Can’t Afford To Pay Taxes Continue Reading