Currently Not Collectible
Currently Not Collectible (CNC) status is a determination made by the Internal Revenue Service (IRS) that a taxpayer is unable to pay their outstanding tax debt. This means that the IRS will temporarily suspend collection efforts, including wage garnishment and bank levies, until the taxpayer's financial situation improves. The IRS code that pertains to CNC status is found in 26 U.S. Code § 6343.
To be considered for CNC status, a taxpayer must complete and submit a Collection Information Statement (Form 433-A for individuals or Form 433-B for businesses) to the IRS. This form requires detailed information about the taxpayer's income, expenses, assets, and liabilities. The IRS will review this information to determine if the taxpayer is financially unable to pay their tax debt.
If the IRS determines that the taxpayer meets the criteria for CNC status, they will assign a hardship code to the taxpayer's account and will cease collection efforts until the taxpayer's financial situation improves. It's important to note that CNC status does not mean that the tax debt is forgiven; it simply means that the IRS will not actively pursue collection until the taxpayer is able to pay.
Understanding the Currently Not Collectible Status in Arizona Tax Law
Are you struggling to pay your tax debt to the IRS or the state of Arizona? You are not alone. Many taxpayers face financial difficulties that prevent them from fulfilling their tax obligations. Fortunately, there are legal solutions available to help you get through this challenging situation. One of these solutions is the "Currently Not Collectible" status.
In this article, we will discuss what the Currently Not Collectible status is, how it works, and how the Carr Law Firm can help you achieve this status to protect your assets and alleviate your tax burden.
What is the Currently Not Collectible Status?
The Currently Not Collectible (CNC) status is a temporary relief program that suspends the IRS or state's collection efforts against a taxpayer who is unable to pay their tax debt. When a taxpayer is in CNC status, the IRS or state will not pursue collection actions, such as levies or wage garnishments, against the taxpayer.
The CNC status does not cancel the tax debt. It merely postpones collection efforts until the taxpayer's financial situation improves. While the taxpayer is in CNC status, interest and penalties will continue to accrue on the tax debt. However, the CNC status offers the taxpayer time to get back on their feet and arrange a more manageable payment plan or seek other tax relief options.
How Does the CNC Status Work?
To qualify for the CNC status, a taxpayer must demonstrate that they are experiencing financial hardship that prevents them from paying their tax debt. The IRS or state uses a formula to determine whether a taxpayer qualifies for CNC status. The formula takes into account the taxpayer's income, expenses, assets, and liabilities to determine their ability to pay.
If a taxpayer's financial situation meets the CNC criteria, the IRS or state will place the taxpayer's account in CNC status. The taxpayer will receive a letter stating that they are currently not collectible and that collection actions have been suspended.
The CNC status is not permanent. The IRS or state will periodically review the taxpayer's financial situation to determine whether they can resume collection efforts. If the taxpayer's financial situation improves, the IRS or state may remove the CNC status and resume collection actions.
How Can the Carr Law Firm Help?
If you are struggling with tax debt and unable to pay, the Carr Law Firm can help you achieve CNC status. Our experienced tax attorneys can review your financial situation, determine your eligibility for CNC status, and help you prepare and submit the necessary documentation to the IRS or state.
We can also help you explore other tax relief options, such as an installment agreement, an offer in compromise, or innocent spouse relief. Our goal is to find the best solution for your unique circumstances and help you achieve financial stability.
Why Choose the Carr Law Firm?
The Carr Law Firm has over 25 years of experience providing legal tax resolution services to taxpayers in Arizona. Our founding attorney, Nathan E. Carr, has a Master's Degree in Taxation and is committed to helping taxpayers resolve their tax problems.
We understand the complexities of Arizona tax law and the challenges that taxpayers face when dealing with the IRS or state tax authorities. We work tirelessly to protect our clients' rights and interests and help them achieve the best possible outcome in their tax matters.
If you are struggling with tax debt, contact the Carr Law Firm today for a consultation. We can help you understand your options and take the necessary steps to achieve financial freedom.
Get Help:
- Contact the Carr Law Firm for a consultation and find out how we can help you achieve CNC status and alleviate your tax burden.
- Explore our website to learn more about our legal tax resolution services and how we can assist you in resolving your tax problems.
- Read our blog posts on Arizona tax law representation to stay informed about the latest developments and changes in Arizona tax law