This is the page that the IRS does not want you to see.
You’re Broke!! They cannot get blood from a stone! You do not have any money and the IRS can not get something from you that you do not have. Basic!
By being broke, the IRS will be required by law to put you on a Currently Non-Collectible Status. Broke means just that. You literally have absolutely nothing to your name. No house or no equity in your home, no savings, no investments and not much money from your work or retirement. This is normally helpful for a year or more and after that the IRS will re-evaluate from time to time. They have ten years and if you remain in CNC for that time, the IRS has to forgive your whole financial obligation amount. ALL OF IT !!
As soon as a person is considered as Currently Not Collectible, all the taxes imposed on him get momentarily suspended. Even if an individual is thought about to be Currently Not Collectible, he or she is still liable to pay the cash owed and the interest accumulated.
The financial status of Currently Not Collectible individual is kept track of, so that he can get back to pay taxes once he gets back on track. This is done when in a year, and the IRS likewise requires the tax payer to send out a copy of his tax returns so that they can compare and see that everything matches. This is the reason the returns need to be accurate without any mistakes in them.
However the story is not over yet. There is yet another option for the tax payers to be preferred by the IRS. If the person continues to have really less income and to be in the Currently Not Collectible status for a period of 10 years, the IRS is accountable to eliminate all the taxes he owes.
Simply puts, the tax payer doesn’t have to pay any taxes or charges that had actually been imposed on him so far.
So if this is actually your scenario, being declared Currently Non-Collectible is a great option for some home owner. If you are getting close to the time that the statute of limitations goes out, your Revenue Officer may get more aggressive and aim to get you to sign something. Please do not be fooled by this.