“Currently Uncollectible” Status
Sometimes a taxpayer simply does not have the income or assets to pay a tax obligation. And there is no prospect of changing that any time soon.
Yet the IRS keeps sending threatening letters, making threatening phone calls, and trying to collect where there just isn’t the money to pay.
In situations like this, a taxpayer might be declared as being in “currently uncollectible” status. This does not make the tax obligation disappear or go away, but it does stop the IRS’s collection efforts.
“Currently uncollectible” status is a short-term solution designed to give a tax payer space and breathing room to rebuild their lives, income, and financial resources.
By taking time to “get back on their feet,” once the taxpayer has re-established better, more solid financial circumstances, the questions of handling the tax debt can be looked at again, when the taxpayer has more resources and capacity to resolve it.
Law Office of Allan R. Pearlman
116 West 23 Street
New York, NY 10011