Introduction Are you struggling to pay your tax liabilities to the IRS? Do your tax debts exceed your monthly savings? If so, you might consider opting for Currently Non-Collectible (CNC) status, a provision offered by the IRS that temporarily halts collection efforts. This status can provide significant relief, giving individuals time to manage their finances without the immediate pressure of IRS collections. In this article, we discuss the eligibility criteria and how to get the CNC status, along with its pros and cons. In order to protect yourself from bankruptcy and mitigate the threat of heavy penalties, you need to hire tax experts at V-Tax Services. Our professionals fulfill the criteria of CNC and deal with the IRS on your behalf so that you can achieve peace of mind relief. What is Currently Not Collectible (CNC) Status? CNC status is granted by the IRS to taxpayers who demonstrate that they cannot pay their tax debts due to financial hardship. When your account is marked as CNC, the IRS temporarily suspends all collection activities, including placing claims on property, garnishing wages, and seizing bank accounts. However, interest and penalties on unpaid taxes keep increasing, and any future tax refunds will be used to pay off the debt. Additionally, the IRS is still legally required to send you tax bills even when your account is in CNC status. Who is Eligible For Currently Not Collectible Status? To qualify for CNC status, taxpayers must demonstrate that they cannot make monthly payments on their tax debt. Eligibility for CNC is based on the following criteria: ● Income: You must disclose your gross monthly income, including earnings before taxes and other deductions. ● Expenses: You need to list essential monthly expenses, such as living costs, healthcare needs, and work-related expenses. ● Assets: The IRS requires information about assets that can be quickly converted to cash to determine how much you can pay toward your tax debt immediately. ● Debt: You must calculate your total tax debt owed to the IRS. If your necessary monthly expenses are more than your income and you have less money than your tax debt, you are probably eligible for CNC status. However, if your financial situation improves, especially if your income exceeds your expenses, the IRS may remove you from CNC status and expect you to resume payments. Ten-Year Statute of Limitations: The IRS has a 10-year period from the date the tax was assessed to collect the debt. If the IRS fails to collect the debt within this period, the debt is typically forgiven. Unlike Offer In Compromise (OIC), CNC status does not stop the clock on this 10-year period, meaning the time continues to tick down while you are in CNC status. Potential Debt Expiration: If your financial hardship persists and the 10-year statute of limitations expires, the remaining tax debt may be forgiven, relieving you of the obligation to pay. Document Needed to Apply For CNC Status To apply for CNC status, you must provide comprehensive documentation to prove your financial hardship. This includes: ● Paycheck Stubs : Copies of your most recent paycheck stubs from each job for the past month. ● Income Statements : Copies of the most recent statements showing all monthly income you receive. ● Real Estate Tax Bills : Copies of the most recent real estate tax bills for all properties owned, even if jointly owned. ● Utility Bills : Copies of utility bills, including electricity, water, sewer, gas, and phone bills. ● Lease or Mortgage Statements : Copies of your lease agreement or mortgage statement showing your monthly rent or mortgage payment. ● Credit Card Statements : Copies of the most recent statements for all credit cards. ● Personal Property Tax Bills : Copies of the most recent personal property tax bills for each car you own. ● Proof of Assets : Proof of assets such as stocks, bonds, and other investments. ● Monthly Expenses : Proof of monthly expenses related to food, necessities, daycare, medical costs, and court-ordered payments like child or spousal support. If you are married, you need to submit the above information to both spouses. How Do I Apply for CNC Status With the IRS? We have explained each step very simply to apply for Currently Not Collectible (CNC) status with the IRS: 1. Eligibility : Show proof of financial hardship to qualify for CNC status. 2. Tax Compliance : Ensure all required tax returns are filed and up to date. 3. Forms to Submit : Complete and submit the appropriate form: ○ IRS Form 433-F (for individuals) ○ IRS Form 433-A (for wage earners and self-employed) ○ IRS Form 433-B (for businesses) These forms provide detailed information about your financial situation, including assets, debts, income, and expenses. 4. Financial Information : Provide details such as bank account balances, property values, credit card debts, employment details, and living expenses. 5. IRS Review : The IRS will review your forms to assess your ability to pay taxes. They may request additional documents to support your financial hardship claim. 6. Ongoing Tax Compliance : Even under CNC status, continue filing your annual tax returns. If applicable, make estimated tax payments and federal tax deposits. By following these steps, you can apply for CNC status with the IRS if you face financial difficulty meeting your tax obligations. For your ease, V-Tax Services experts can help you to apply for CNC by meeting all the requirements of the IRS. IRS Review Process If the IRS determines that you cannot pay your taxes, they will grant you a Currently Not Collectible (CNC) status. This temporarily stops all collection efforts. It is important to understand that CNC status is not a permanent solution. It doesn't stop penalties, interest, or federal tax claims from being added up. Following are the pros and cons of CNC status awarded by the IRS. Pros And Cons of IRS CNC Status Pros of CNC Status Cons of CNC Status Provides relief from immediate IRS collection actions such as levies on wages or bank accounts. Federal tax claims may still be placed on your property, which could affect your ability to sell or refinance it. If the IRS fails to collect the tax debt within the 10-year statute of limitations, you will not have to pay the debt. Interest and penalties on unpaid taxes keep adding up, potentially increasing the total amount owed over time. Offers temporary relief from paying taxes if you are unable to afford it currently. CNC status is not a permanent solution; the IRS will periodically review your financial situation to assess your ability to pay. Particularly beneficial if you have a fixed income (e.g., disability, pension, Social Security), as financial reviews typically do not affect this status. You must continually demonstrate financial hardship to maintain CNC status; any increase in income could lead to loss of CNC status and reinstatement of IRS collection efforts. Stops wage deductions and bank account freezes during the CNC period. Allows for potential expiration of tax liabilities if not collected within the statute of limitations. Interest and penalties on unpaid taxes continue to accrue during the CNC period, potentially increasing the total amount owed over time. Maintaining CNC Status Maintaining CNC status requires ongoing demonstration of financial hardship. The IRS will periodically review your financial situation to ensure you still qualify. Any significant increase in income or decrease in expenses could lead to the loss of CNC status, and the IRS may resume collection efforts. It is important to keep detailed records of your financial situation, and it is better to hire V-Tax Services to respond to any IRS requests for information. How Can We Help You? CNC status helps people stabilize their finances, cover necessary living costs, and address their tax debt over time. It is important to consult with a tax professional such as V-Tax Services to fulfill the eligibility criteria and understand how to qualify and apply for CNC status. Our experts at V-Tax Services help you achieve the CNC status according to your financial situation, or if needed, they propose another suitable option to reduce your tax burden. It is important to actively seek lasting solutions to your financial issues in compliance with the IRS resolutions. Contact us for a long-lasting IRS Resolution to your tax liabilities.

Are you facing challenges with tax debt or IRS tax problems in Denver or any other region of Colorado state? Do you want to save money on your tax bill and want to mitigate the looming threats of fines and penalties with tax resolution services? Our tax debt relief professionals at V-Tax Services provide solutions for state or IRS tax problems that seem to be irresolvable and difficult to handle. In this article, we will explain the possible options for tax resolution to achieve tax debt relief in Denver by availing the services of a leading tax advisory firm V-Tax Services in Denver. IRS Tax Resolutions If you want to get rid of the IRS tax notices for tax debt, tax levies, and back taxes, you need to approach a tax advisory firm like V-tax Services in Denver for tax resolution services. Our tax professionals offer multiple tax relief services ranging from Offer in Compromise (OIC), Fines Abatement, Currently Not Collectable (CNC), Installment Agreement, or any other options for tax relief. In addition to tax resolution, V-tax Services offers personalized services for tax planning, tax preparation, and tax filing for your personal or business returns, regardless of the size of outstanding tax obligations. We can protect you from the severe consequences of a lack of tax filing by applying suitable tax solutions and dealing with tax authorities to give you peace of mind. Hire V-Tax Services experts to shift tax-related affairs on our shoulders and just concentrate on your business and personal life and obligations. Tax Relief With Tax Resolution Options Relief in IRS taxes is possible; however, it depends upon the taxpayer's ability to pay now or in the future. The tax relief can also be validated in the situation that caused the liability, or errors made by either the taxpayer or by the taxation authorities. The Experts at V-Tax Services evaluate your outstanding tax obligation and propose the most suitable solution to help you out of tax loopholes. The following are the available options for tax resolution: 1. Offer in Compromise An Offer in Compromise (OIC) enables taxpayers to resolve their tax debt for less than the total owed, especially when full payment becomes cumbersome for you. This is an agreement between taxpayers and the Internal Revenue Service (IRS) to settle tax liabilities for a reduced amount. The IRS will agree to an OIC with the following three conditions ● There is uncertainty that the IRS can collect the full amount owed ● There exists a valid uncertainty regarding the accuracy of the owed amount. ● The compromise promotes efficient tax management. The Aim of an OIC The Offer in Compromise aims to reach a settlement that benefits both the government and the taxpayer, providing a fresh start and encouraging future compliance. Eligibility For Offer in Compromise: The following are the eligibility criteria to apply for the Offer in Compromise: ● You have submitted all required tax returns and fulfilled all estimated payment obligations. ● You are not currently undergoing bankruptcy proceedings. ● You have a legitimate extension for the current year's return ● If you are an employer and have deposited taxes for the current and preceding two quarters. In 2014, more than 60% of offers were declined for the Offer in Compromise. Those capable of paying through installment plans or alternative methods typically do not qualify for the Offer in Compromise. The V-Tax Services firm evaluates your eligibility for tax settlement through an Offer in Compromise and presents your case for the best possible outcome with the IRS. 2. Currently Not Collectible When the IRS puts your tax debt on Currently Not Collectible (CNC) status, it means your tax debt should be removed from active collections. The financial hardship or an inability to pay tax debt qualifies taxpayers for CNC status. To qualify, you must demonstrate to the IRS that paying your tax debt would create a hardship for you and your family. If it is approved, you will receive a letter stating your collection case is temporarily closed due to financial inability. Qualifying For CNC Status ● The IRS will first check your savings to see if they can be used to pay taxes or not. ● If you lack assets, the IRS will review your income and expenses before assigning you the CNC status to determine whether you qualify for an installment agreement or not. ● The IRS may request a financial statement (Form 433), proof of monthly income (paystubs, bank deposits), and living expenses (receipts). With the CNC status, you might not need to pay the IRS until your financial situation improves. Yet, a drawback of the IRS's non-collectible status is its temporary nature, typically lasting up to two years. Advantages of Currently Not Collectible Status If you cannot afford to pay owed taxes, filing for CNC status offers the following benefits such as: ● You have time to pay without IRS collection efforts or wage garnishment. ● If your situation doesn’t improve within 10 years, you surpass the collections statute of limitations, and the IRS forgives your debt, including penalties and interest. Disadvantages of Currently Not Collectible Status Though CNC status provides temporary relief for paying federal taxes, it has the following disadvantages: ● Interest and penalties are still assessed, raising your owed amount. ● The IRS will apply your future tax returns toward your outstanding balance. ● CNC status isn't permanent. Your financial status is annually reviewed, and the IRS can revoke it if it determines you are able to pay. ● If you owe over $10,000, the IRS can place a lien on your property until the debt is settled. The experts at V-Tax Services will investigate your savings and assets and guide you throughout the process of getting Currently Not Collectible Status. 3. Installment Agreement The IRS offers an Installment Agreement for tax repayment, extending up to 72 months for income taxes, covering penalties and interest. During this period, the IRS is prohibited from levying or garnishing your wages. Direct Debit Installment Agreements Direct debit installment agreements allow repayment without disclosing income and assets to the IRS, for debts under $25,000, or between $25,000 and $50,000, repayable within 72 months, with minimal paperwork. Partial Pay Installment Agreements If you are not meeting the conditions of Direct Debit Installment Agreements, the IRS offers a Partial Pay Installment Agreement (PPIA). You'll submit forms and documents for the IRS to determine your payment. To qualify for this agreement you have to owe $10,000 or more and have a lack of assets for payment, an inability to afford standard installments of IRS. In a partial payment installment agreement, taxpayers pay their liability monthly until the collection statute expiration date (CSED), usually ten years from the tax assessment date, but reviewed every two years. Installment Agreement Owed Amount Time Duration Direct Debit Installment Agreements More than $25,000 but less than $50,000 72 months Partial Pay Installment Agreement (PPIA) $10,000 in back taxes or more. CSED is typically ten years, reviewed every two years 4. Fines Abatement: If a taxpayer has a valid reason for not adhering to tax laws, there is a chance that they could request the waiver of any fines imposed. The professional at V-Tax Services will assist you in fine abatement. 5. Amending tax returns: Numerous instances arise in which taxpayers may discover errors in their previous filings or find that tax authorities have made a mistake on their behalf, resulting in an overpayment of taxes. In such cases, individuals can rectify the situation with the guidance of tax experts of V-Tax Services. Why Choose US V-Tax Services The best tax advisory firm in Denver can help you file unfiled tax returns, prevent bank levies, conduct audits, remove tax fines, and support taxpayers in meeting tax compliance with the IRS. We offer Tax resolution services throughout Colorado State, especially in Denver, and specialize in multiple IRS debt reduction services. Our experts make sure to keep your interests safe, stop any future actions from tax authorities, and help you grow your financial situation. Contact us and allow us to deal with tax authorities as we know the ins and outs of working with Tax authorities. Our Tax Resolution Services Include: ● Get a free initial consultation ● Represent you in communication with the IRS ● Sort out federal and state taxes, even if you haven't filed ● Ensure you're up-to-date with all tax filings ● Negotiate a manageable solution for your tax debt ● Offer guidance for informed decision-making ● Provide personalized service at fair prices ● Course Tax Preparation ● Stop Enforced Collections ● Remove wage and bank levies ● Business Tax Service ● Individual Tax Service ● Tax Strategies

Do you want to avoid paying the IRS a large lump payment of your tax debt? Do you want to reduce your tax bill and make monthly payments? In this scenario, the best option for you is to go for a Partial Payment Installment Agreement (PPIA). A partial payment installment agreement helps you settle tax debts for less than you have to pay for. With this option, you pay monthly until a set date, after which the IRS nullifies the remaining tax liability. Thus, It cuts your tax bill, letting you pay in installments. Now the question raised in your mind, is this option is right for you? and do you qualify for this type of payment plan? The experts at V-Tax Services can help you decide if a Partial Pay Installment Agreement is fit with your situation, and we help you throughout the application process. In this article, you will learn all about the Partial Pay Installment Agreement. What Is a Partial Payment Installment Agreement? With a partial payment installment agreement, you pay monthly until the collection statute expiration date (CSED), usually 10 years after tax assessment. After the CSED, you do not need to pay more, even if your payments were less than what you owed. How Partial Payment Installment Agreements Work Partial payment installment agreements work in a simple way. For your better understanding, here is a simple analogy to show how it works. For example, someone owes $30,000 in taxes; however, one can only afford to pay $200 each month. The collection statute for one's installment expires in five years. If one qualifies for PPIA, one has to pay $200 every month for five years. After that, even if one has only paid $12,000, they won't owe anymore. But there's a twist. Every two years, the IRS checks the taxpayer’s financial situation again. Let's say after two years, the IRS sees the taxpayer's financial situation has improved. Then, the taxpayer might have to pay $300 each month instead of $200 for the rest of the five years. In the other case, if the IRS finds out the taxpayer inherited a vacation home, the IRS has the authority to make the taxpayer have to sell it or get a loan against it to pay off the taxes. This is a downside of these payment plans. Who Should Adopt a Partial Payment Installment Agreement? The answer to this question comprises the following conditions. If your financial situation meets the following conditions, you must go for the PPIA plan: You can not pay all your taxes at once. You do not own anything valuable to sell and pay off your taxes. You can not borrow money to cover your taxes. You can not manage the monthly payments on a regular IRS payment plan. Your request for a lower settlement was turned down. You don't meet the requirements for financial hardship relief or or currently not collectible status. A partial payment plan is a good choice for those who can not pay the whole amount of owed tax. It is the best option if you meet the above specific conditions. If you cannot decide on the conditions, you need to approach V-Tax Services consultants for the tax resolution process. Requirements for a Partial Payment Installment Agreement To qualify, you usually need to owe $10,000 or more in back taxes. You must show that you don't have assets to sell or can't afford monthly payments on a regular IRS plan. Also, you can't be in bankruptcy or have had an offer in compromise accepted. For instance, if you owe $20,000 for 2018 taxes and get an offer in compromise accepted, you can't switch to a Partial Pay Installment Agreement for those taxes. If you qualify, it's best to set up automatic payments from your bank account or paycheck. If you defaulted on an agreement in the last 24 months, you must use these options unless you're unbanked or self-employed. You also need to be up to date with tax filings, deposits, and estimated payments. The IRS checks your finances every two years. If things change, they might ask for higher payments or full repayment. How to Apply for a Partial Payment Installment Agreement To sign up for a Partial Payment Installment Agreement, start by applying online or filling out Form 9465 (Installment Agreement Request). You will also need to complete either IRS Form 433A (for individuals) or 433B (for businesses). These forms ask for detailed info about your money, like what you own, what you owe, and what you make. In this situation, V-Tax Services can help you deal with the PPIA plan to the IRS on your behalf. Depending on how much you owe, the IRS might look even closer at your finances. If they spot anything that may be an alternative to your tax debt, they might ask for: Details about any money or stuff you didn't mention. Why has your income dropped by 20% or more? Records of things you own, like land or cars. Info from the Department of Motor Vehicles. Your credit report. Bank statements. After reviewing your finances, the IRS might ask you to sell stuff or take out loans. After that, the IRS figures out how much you need to pay each month. How the IRS Calculates Your Monthly Payment With IRS payment plans, you have to pay what you can afford. However, you are not allowed to decide the amount. IRS has strict policies about expenses and wants you to use all your extra money for tax payments. An expert tax advisor like V-Tax Services can help you get the most allowances. Usually, you need to pay at least $25 a month for a partial payment plan. If you cannot afford this threshold amount, you might qualify for hardship status, where the IRS stops collecting until your situation improves. Selling Assets for Partial Payment Installment Agreements The IRS may require you to sell assets or take out a loan against them to cover part of your tax liability. For instance, if you owe $30,000 and you own a new luxury car, you will probably be required to sell it. Only a very small amount of assets are exempt from this requirement as the IRS has power when it comes to collecting overdue payments. You might not have to sell your assets or borrow a loan if these situations apply: The assets have a minimum cost. No creditors will grant you a loan against this asset. If your spouse shares ownership of the asset but isn't responsible for the tax debt The asset cannot be sold in the market. The asset is the main source of income so you cannot make your monthly PPIA payments without this asset. Selling the asset would push you into a severe economic crisis. Before selling any of your assets as demanded by the IRS, you need to consult with tax advisors of V-Tax Services. They can make sure you are making the best decisions and getting the best deal with the IRSExtending the Collection Statute Expiration Date Once more, the collection statute expiration date (CSED) marks when the IRS can no longer demand payment for your taxes. If the IRS thinks you will gain something valuable that could cover your tax debt after this date, they might ask you to extend it before agreeing to a PPIA. If you are on a fixed income and can only afford small payments, but expect a large sum from a trust after your tax collection time ends, the IRS might require you to extend the deadline before approving your payment plan. The same applies to businesses holding assets that could cover taxes after the deadline, like unsellable property. Your tax collection deadline (CSED) will extend automatically in these cases: Applying for an offer in compromise. Requesting a Collection Due Process (CDP) hearing. Asking for innocent spouse relief. Having your case reviewed in tax court. During a bankruptcy case and six months after the automatic stay. Before extending your CSED, you need to ask V-Tax Services experts. The experts will guide you and help you make an informed decision regarding the extension of CSED as it may be necessary for a PPIA and to avoid further collection actions, but only do so if it benefits you. How Can V-Tax Services Help You? A Partial Payment Installment Agreement (PPIA) is a tax resolution method provided by the IRS to settle your outstanding tax debt through monthly payments over a set period. Some individuals may opt for a lump-sum payment through an Offer in Compromise, others find it more convenient for PPIA payments until the expiration of the collection statute. To determine the most suitable approach for your circumstances, seek guidance from the tax specialists at V-Tax Services. We will assess your situation and recommend the IRS resolution option that aligns with your financial situation. Setting up a PPIA can be complex, but we can help. At V-Tax Services, our experts are experienced in PPIAs and other tax resolution methods. We work hard to minimize your tax payments, saving our clients millions of dollars.