There are a lot of factors to consider when you're deciding whether or not to file a Currently Not Collectible with the IRS. One of the most important is whether you think you have a good chance of being accepted.
If you've been struggling to pay your taxes and you think that an offer may be your best option, now may be the time to file. In this blog post, we'll discuss why now may be the best time to submit your filing and what you can expect if it's accepted.
What Is A Collection Appeal?
The first step in understanding how to make the most of your collection appeal is to understand what it is. A collection appeal is a process that allows you to dispute the amount of tax debt that you owe. This can be done by requesting a review of your case or by going through an appeals process. If you are successful, you may be able to reduce the amount of tax debt that you owe.
What Is Currently Not Collectible?
Currently Not Collectible is a status that the IRS can place on your account if you can demonstrate that you cannot afford to pay your taxes. This means that the IRS will stop all attempts to collect from you at this time. It's important to note, however, that this is not a permanent solution and it's very possible that the agency could start collection efforts again in the future.
The tax season is here, and that means the IRS is actively working to collect unpaid taxes. If you're one of the many Americans who owe money to the government, now is the time to take action. Filing a Currently Not Collectible may be your best chance at avoiding penalties and interest or reducing the amount you owe.
One of the biggest reasons to file a Currently Not Collectible is to avoid penalties for failure to file. If you don't submit your taxes by the due date, you can expect to face a penalty of at least $135. The penalty for filing late increases incrementally the longer you wait.
The IRS also charges a penalty for failure to pay. This penalty is equal to 0.50% of the amount you owe each month, up to a maximum of 25%. If you're already behind on your payments, this can be a crippling addition to your debt.
What Happens if My Offer Is Accepted?
If the IRS agrees to place your account in Currently Not Collectible status, they will stop all collection efforts against you. This includes phone calls, letters, and wage garnishments. It's important to note that this does not mean the debt goes away - it just means that the IRS is temporarily suspending collections.
In case you are able to keep up with your payments while in Currently Not Collectible status, the IRS may eventually remove the status from your account. However, if you miss a payment or stop making payments altogether, the agency will resume collection efforts.
It's important to remember that Currently Not Collectible is not a permanent solution. The IRS can and will restart collections against you if you don't keep up with your payments. If you're considering this option, it's crucial that you speak with a tax professional to discuss your specific situation.
How to File for Currently Not Collectible Status
In order to file for Currently Not Collectible status, you'll need to complete Form 433-A (Collection Information Statement for Individuals Who Are Self-Employed or Have Taxable Income Below $100,000) and submit it to the IRS. Once you've done this, the IRS will review your case and make a determination.
If you're not sure whether or not Currently Not Collectible is the right option for you, we encourage you to speak with a tax professional. They can help you understand your options and make the best decision for your situation.
What Are The Chances Of My Currently Not Collectible Offer Being Accepted?
The odds are pretty good. In 2019, the IRS accepted over 71% of all offers submitted. This means that there's a decent chance your offer will be accepted if you submit one. Of course, the chances of your offer being accepted will vary depending on your specific situation.
If you're considering submitting a Currently Not Collectible offer, it's important to speak with a tax professional. They can help you understand your options and make the best decision for your situation.
So, in case you think Currently Not Collectible may be the best option for you, contact us today. Our team of tax experts can help you determine if this is the right solution for your unique situation.