Currently not collectible status

Currently Not Collectible means that a taxpayer does not have the ability to pay his or her tax debts at this time. The IRS can declare a taxpayer “currently not collectible,” after the IRS is shown evidence that a taxpayer does not have the ability to pay. Such evidence is usually obtained from the taxpayer on IRS Form 433-F, Collection Information Statement.

When you are  granted Currently not Collectible status, the IRS must stop all collection activities and efforts, including levies.

By law, you are guaranteed to remain in currently not collectible status for at least one year. After one year has passed, the IRS computer systems will begin monitoring your annual tax return filings.

Once you file a tax return that reports an increase in income beyond what you were making when you were first placed into currently not collectible status, the computer will move you back into collections.

To receive Currently not Collectible status from the IRS you must prove and show that you do not have any assets that would enable you to pay the back tax debt you owe. You must prove that you have enough money to pay for the very basic necessities of life and nothing else. The necessities of life would include: rent, mortgage, food and clothing, health insurance, car payments, auto maintenance, court ordered payments (child support, etc), secured loans, utilities, etc. These are called allowable expenses.

The process to receive Currently not Collectible  status is complicated and you will need to fill out the Collection Information Statement for Wage Earners and Self-Employed Individuals or Form 433-A, which is used by the IRS to determine your Reasonable Collection Potential on your tax debts.