Currently Non Collectable Status


Currently Non Collectable status is an IRS account designation that essentially is a $0 per month payment plan. Cases where the client does not qualify for an Offer In Compromise, but also can be proven to not have enough income for a payment plan, will often qualify for Currently Non Collectable Status.

But doesn’t that debt just stay forever?

Actually no, the IRS only has 10 years to collect on a debt form the date it was assessed. There are some exceptions to this that will add time to that total:

  1. Filing an Offer in Compromise
  2. Filing a Bankruptcy
  3. Being out of the country for more than 6 months
  4. Requesting a Payment Plan or Currently Non Collectable status (adds a brief time to it while the request is processing, but not once in the status)

The time in which one of those 4 things is pending is added to the 10 year time frame for the IRS to collect, called the Collection Statute Expiration Date, often referred to as the “CSED.” For example, if someone filed their 2006 tax return in 2007, and it was processed on May 20, 2007. The IRS normally has until May 20, 2017 to collect on that debt. If they filed a bankruptcy in 2008 and it lasted 5 months, the IRS now has until October 20, 2017 to collect on that debt.

Many cases that involve dissipated assets are not eligible for an Offer In Compromise, so Currently Non Collectable status is the best way to go.

Will the IRS ask for a payment later?

Only if you show a substantial increase in income. If your tax returns stay the same year after year, typically no one bothers you and the case stays in Currently Non Collectable status until the debt expires. At TRP, you always resume your case at the low monthly rate your case left off on. So if the IRS came back in the future and we had to re-place you into Currently Non Collectable status, it won’t be a headache for you.

Offer In Compromise, Currently Non Collectable Status, or Payment Plan?

If you are not sure where your tax case falls, let one of our expert tax attorneys evaluate your case for free. Even if you choose to go it alone, we will offer you some free resources to point you in the right direction. Give us a call at (888) 515-4829, or fill out the form below and one of our attorneys will call you back.

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