Not Collectible Status/Financial Hardship
If you simply cannot pay your delinquent taxes because of your current financial circumstances and have no assets available as disposable income, the IRS has the option of placing your tax liability into the status of Currently Not Collectible. This is not intended to mean that your tax liability has been waived. It is generally a temporary status, and the IRS will continue to review your income, liabilities and expenses, until such time it feels you should be able to pay.
Getting Your Tax Liability Assigned to Not Collectible Status
The IRS will not automatically assign a tax liability to Not Collectible status. It often requires appealing to them on the grounds of financial hardship. If you are a resident of a community in King County, Pierce County or Snohomish County, Washington, and cannot meet your tax liability, talk to a tax attorney at Insight Law. We offer a free consultation to review your circumstances and give you an honest appraisal of whether you will qualify to have your liabilities assigned as Currently Not Collectible.
If you retain us to represent you, we will collect and present all relevant financial records and negotiate on your behalf with the IRS. Throughout the process, we will look for every opportunity to help you reduce the burden of your tax liability through an offer in compromise, a settlement installment agreement or audit reconsideration.
If Your Current Not Collectible Status Is Being Removed
A tax liability may remain in Not Collectible status for three or more years before the taxpayer receives notification that the status has been removed. (In fact, the IRS has computer programs that automatically track a taxpayer’s reported income every year.) Many taxpayers are surprised and frustrated to learn that their prior tax liability has been removed, even though their financial circumstances have not greatly improved over the intervening years. If you feel that repaying your tax liabilities at this time will create a financial hardship on you and your family, Insight Law is ready to help you negotiate an extension of the Not Collectible status.
Our firm offers a full range of services for people with an outstanding tax balance owed the IRS, including:
- Tax workouts, offers in compromise
- Reduced installment agreements
- Removal of IRS liens, levies and wage garnishments
- Innocent spouse relief
Free Initial Consultation
From offices in Seattle, Bellevue and Burien, our lawyers advise and represent clients in communities throughout King County, Pierce County and Snohomish County, Washington. Call us toll free at 206-922-8078 or contact our office by e-mail to arrange an initial consultation with an experienced Tax Lawyer at our firm today.
Unemployed or Low-Income Taxpayers Needing Pro-Bono Tax Lawyer Assistance
The federal government provides a free tax attorney to those meeting certain income guidelines. In the Seattle area, you can contact the University of Washington Federal Tax Clinic at 206-685-6805. They will take you through a list of questions to see if you meet the eligibility requirements for the clinic. Our attorneys provide pro-bono legal services through the Federal Tax Clinic, but you must contact them directly to arrange these services. Their website link is: