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If you are unable to pay your tax debt in full, you may be able to get the Internal Revenue Service (IRS) to grant you Currently Not Collectible (CNC) status. This temporarily delays their tax collection attempts, offering you breathing room to stabilize your finances.
The process of obtaining Currently Not Collectible status in Vienna involves detailed documentation and navigating IRS procedures and standards. An experienced tax professional from Pontius Tax Law could assess your unique financial situation and gather the necessary evidence to maximize your chances of approval.
If a Vienna taxpayer is facing significant financial hardship and is unable to satisfy a current tax debt, they may be eligible for CNC status from the IRS. This temporary status stops IRS actions like wage garnishments and bank levies, giving you time to address your financial situation. To qualify for CNC status, your monthly income should be only enough to cover necessary living expenses based on IRS standards. Having little-to-no disposable income after essential expenses is a key factor.
You may qualify for CNC status if you face significant financial hardship that prevents you from paying tax debt without compromising your ability to meet essential living expenses and current year tax obligations.
Vienna businesses experiencing financial struggles that make it impossible to pay back taxes may also qualify for CNC status. This could involve companies facing significant revenue loss or high operational costs that render them unable to meet their tax obligations. Additionally, small businesses that have closed, or corporations that have undergone a liquidating bankruptcy, may be eligible. However, the IRS generally does not grant CNC status for certain business taxes like corporate income tax or payroll tax.
The requirement for both individuals and businesses to qualify for CNC status is demonstrating that paying the tax debt would cause severe financial hardship, leaving them unable to afford necessary expenses. The IRS thoroughly reviews the applicant’s financial situation, including income, expenses, and assets, to determine eligibility. Taxpayers typically need to provide detailed documentation to support their claim of financial hardship.
If you have significant assets that could be used to pay your tax debt, they may require you to sell them. However, assets considered necessary for individual taxpayers, such as retirement savings or your primary residence, may be taken into account. You must provide detailed financial documentation to support your inability to pay. This documentation includes income verification (pay stubs or profit/loss statements), bank statements, and proof of essential expenses such as rent/mortgage, utilities, medical costs, and car payments.
The IRS uses standard guidelines to evaluate the reasonableness of your expenses. IRS compliance is necessary, meaning you must file all required recent tax returns and ensure you do not owe again in future years. In some cases, remaining in CNC status until the 10-year collection statute expires can result in the debt being written off. If you believe you may qualify for CNC status, contact a Vienna attorney as soon as possible.
CNC status is a temporary reprieve, not a permanent solution to your tax debt. Interest and penalties will continue to accrue, and the IRS can eventually resume collection efforts if your financial situation improves.
If you are facing difficulties with IRS collections and believe you might qualify for Currently Not Collectible status in Vienna, consulting with our former IRS Revenue Officers is an important next step. Our legal team knows how the agency works and can help you explore your options and ensure you are taking the most appropriate steps to resolve your outstanding debt. Contact us today to schedule your confidential case consultation.
Pontius Tax Law, PLLC is a tax law firm that strives to resolve sensitive tax problems through trust, dedication and value. The law firm was founded by John Pontius with offices in Washington, DC, Rockville, MD, Bethesda, MD, Fairfax, VA, and Alexandria, VA. Mr. Pontius represents individual and business clients with sensitive and serious tax matters before the Internal Revenue Service and state taxing authorities. His client base is local, national, and international.
Over the course of his career, Mr. Pontius has represented businesses and individuals with complex tax issues in the following areas: FBAR examinations, offshore and domestic disclosures, FATCA, FIRPTA, tax planning, unfiled tax returns, release of tax liens and levies, trust fund recovery penalty, IRS and state audit examinations, as well as appeals, penalty abatement, U.S. Tax Court litigation, along with defense of tax fraud and evasion. If you require assistance from a tax lawyer, contact Mr. Pontius to discuss your situation.
