When Times Are Hard and the IRS Comes Knockin’ (or Mailing Notices…)

There are a few situations in life that instantly give you that feeling of sickness in the pit of your stomach. For example, when you are driving down the road, not paying much attention, then out of nowhere those blue and red lights appear, or when you receive a letter in the mail from the Internal Revenue Service (IRS).

Maybe the amount is accurate, inflated with interest and penalties but otherwise reflective of the amount that you owe. What are your options if your financial hardships leave you unable to pay towards the balance?

One option is to seek “Currently Not Collectible” status with the IRS. If your account is in “Currently Not Collectible” status, the IRS generally won’t try to collect from you. Typically, this relieves you from a levy against your assets and income. However, the IRS will still assess interest and penalties to your account and may keep your refunds and apply them to your debt. You will also continue to receive an annual bill from the IRS.

This status is for the taxpayer that owes but can’t afford to pay while still meeting their basic living expenses. Are your monthly expenses greater than your income? Does your income barely cover your expenses? Are you currently without an income? Are you on a fixed income like Social Security, Unemployment, or a welfare program? These are all considerations that could fit the “Currently Not Collectible” status.

Don’t wait until you get a notice to worry about your taxes. If you need guidance and someone to advocate for you, the professionals at The Center for Financial, Legal, & Tax Planning, Inc. are very experienced in dealings with the IRS. Do not hesitate to contact us at (618) 997-3436.