Saturday, May 2, 2009

How Do I Know If I Qualify For CNC For My Tax Debt?

How do you know if you qualify for Currently Non Collectible status with the IRS? This is not an easy resolution to obtain with the IRS. There are many restrictions,that prevent the average taxpayer from being considered for CNC. So often in resolution, we see where our everyday expenses often not considered an allowable expense with the IRS. The IRS will only consider necessary living expenses count.

Expenses such as tuition expenses for your children, expenses above the standard (factored by the county you live in), private school expense, over the standard car payments. If there are two people working in the household, the IRS will allot for two car payments. However, if there are more than two people lieving in the household, paying for their childs vehicle, the IRS will not deem this as an allowable expense.

So often, we think the IRS will allow such expenses, but they don't. I had a client this week that would have been considered CNC if they would accept her tuition payments for her children's college. The IRS will view this as an opportunity for the child to get a job and help pay on this type of expense.

In order for the IRS to even consider you to be Currently Non Collectible, your Monthly Disposable Income cannot be over $25 a month. What I mean by Monthly Disposable Income is your income less your allowable expenses (determined by the IRS). As you can see, financially you are strapped ( for lack of a better word) and need relief from your tax debt.

If the IRS considers you as Currently Non Collectible, you will placed in this resolution for at least a year (if not longer) , then the IRS will review your financials to determine whether or not you have the ability to pay the IRS on a monthly installment agreement. While in CNC, the CSED dates still run (how long the IRS has to collect on your debt) but interest will still accrue.

If you have tax debt, and you need help determining whether or not you would be a good candidate for CNC, contact a professional resolution firm today for relief of this continuous burden.


Anonymous said...

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footbolito17 said...

Get your own attorney to represent you with that... IRS prefer negotiating people who are much more knowledgeable on the tax laws...

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