Currently Non Collectible
Given the state of the economy, the IRS understands and has implemented a hardship option available to taxpayers who qualify. The program named Currently Non Collectible (CNC) is just as it sounds, the taxpayer cannot currently be collected from due to their financial hardship. The IRS reviews the taxpayer’s income versus expenses and assets versus equity. The allowable expenses must exceed the income of the household and there must be no liquid equity. While taxpayers are not required to pay back the taxes due, the tax liens remain and interest continues to accrue on the liability.
Offer in Compromise
The Offer in Compromise (OIC) is a program offered by the IRS for taxpayers which allows them to settle their tax liability for a lesser amount. The IRS looks at many factors to determine if a taxpayer qualifies for the Offer in Compromise program. The IRS mainly focuses on the taxpayer’s disposable income and available assets but other factors are taken into consideration such as age, health, and education. The attorneys at Tax Resolution Professionals have years of experience dealing with the IRS and have successfully had many OICs accepted. Our professionals can review your financial situation and determine if you qualify for an OIC.
When a taxpayer is unable to full pay the tax debt, the IRS allows individuals and businesses to enter into an installment agreement to resolve their liability. Generally, the IRS requires that individual liability is full paid in 60 months and business liability to be full paid in 24 months. If the debt cannot be paid off within this time frame, financial documents and substantiation must be submitted to enter into a longer agreement. Our professionals have the expertise and negotiation skills to enter you into a payment arrangement that is both feasible for the taxpayer and acceptable by the IRS.
An IRS liability can quickly escalate as penalties and interest continue to accrue. You may be able to eliminate the penalties if you can show reasonable cause. Penalty abatement is based on your claim that circumstances outside your control led to the IRS debt. Reasonable cause includes, but is not limited to, death, illness, incorrect advice from a professional, flood and other natural disasters, etc. If the penalty abatement request is initially denied, taxpayers have appeal rights and can have another opportunity to present their case and request for penalty abatement. Contact an attorney today and see if you qualify for penalty abatement.
By requesting innocent spouse relief, you can be relieved of responsibility for paying tax, interest, and penalties if your spouse (or former spouse) improperly reported items or omitted items on your tax return. Generally, the tax, interest, and penalties that qualify for relief can only be collected from your spouse (or former spouse). However, you are jointly and individually responsible for any tax, interest, and penalties that do not qualify for relief. The IRS can collect these amounts from either you or your spouse (or former spouse).
You must meet all the following conditions to qualify for innocent spouse relief.
- You filed a joint return which has an understatement of tax due to erroneous items (defined below) of your spouse (or former spouse).
- You establish that at the time you signed the joint return you did not know, and had no reason to know, that there was an understatement of tax.
- Taking into account all the facts and circumstances, it would be unfair to hold you liable for the understatement of tax.
- A request for innocent spouse relief will not be granted if the IRS proves that you and your spouse (or former spouse) transferred property to one another as part of a fraudulent scheme. A fraudulent scheme includes a scheme to defraud the IRS or another third party, such as a creditor, ex-spouse, or business partner.
Statute of Limitations
The IRS statute of limitations is 10 years but can be extended during case resolution proposals or during the appeals process. Once the 10 years expires your debt will be extinguished. As the expiration date nears the IRS becomes far more aggressive attempting to collect the debt as it will soon expire.