It's not so horrible owing money to the IRS.
What are you going to say now?
Yes, that's correct. It's not such a bad situation.
Well... That is, as long as you're broke.
Because if you have a lot of money or assets, the IRS will do everything they can to get every single penny from you. (Unless you get some assistance.) If you're looking for assistance in Charlotte, you've come to the correct place.)
However, if you don't have much, they'll quickly figure out that they won't be able to gain anything from you. This is especially true if your income falls below a mystical set of numbers called Allowable Living Expenses, which the IRS creates every year (ALE).
You can't squeeze water from a rock, after all.
If you can show the IRS that you have no significant assets and your income is below the ALEs, you may be placed in what is known as CNC status.
Proving You're Bankrupt
You must give specific financial information to the IRS in order to demonstrate your eligibility for this special CNC status. You may complete everything over the phone for low-dollar tax debts, and they will just accept your verbal comments regarding your income and expenses.
You'll need to fill out paperwork called a Collection Information Statement if you have a large tax debt. This form will ask you a number of very personal financial questions, such as:
- Income sources and monthly amounts
- Bank accounts, credit cards, and investments are all examples of financial instruments.
- Rent or buy a house with a mortgage.
- Vehicles such as automobiles, boats, ATVs, RVs, and any other vehicles you own.
- Jewelry, artwork, and collectibles are examples of other valuables.
- Food, utilities, medical care, and other living expenses are included in the monthly living expenses.
If you have credit lines or credit cards that may be used to pay the IRS, they'll ask you to utilise those first. They may even require you to execute a cash-out refinance on your home if you have equity, or sell your beloved, paid-for RV in order to pay off your tax obligation.
If you don't have any of it, the IRS will examine your earnings and compare them to the ALEs. Congratulations, if your income is below the IRS threshold, you may be eligible for CNC status!
We'd be pleased to conduct this study with you or anyone else in Charlotte to see if this is a viable option before calling the IRS. Make an appointment with us to discuss your financial situation:
https://calendly.com/saragonzalez
What Will Happen Next?
You won't have to worry about things like wage garnishments or money missing from your bank account after your tax debts are placed in CNC status. The IRS's collection actions will come to an end. (Those in Charlotte who are in this circumstance can breathe a sigh of relief.)
You still owe them money, though. The balance owed will continue to accrue interest and penalties, and you will be sent a bill on a regular basis. This isn't a cause for concern because the IRS is mandated by law to send you a reminder on a regular basis.
It's critical to understand that CNC status is only a temporary solution. In theory, the IRS is required to evaluate all CNC cases on an annual basis to see if your financial status has changed. However, due to a shortage of staffing, these reviews do not take place. Instead, the IRS uses a variety of computerised matching techniques to try to find accounts that need to be investigated.
If you get a big increase at work, or switch jobs for a significantly higher pay rate, or have a successful business year if you're self-employed, for example, the IRS computers will do a happy dance and flag your account for review. They assume that if you suddenly start making more money, they'll be able to get their hands on part of it.
The Final Frontier
One of the most intriguing aspects of being designated as a CNC is that the statute of limitations will ultimately run out.
The IRS has ten years to collect on any tax debt in general. There are a number of factors that can lengthen this duration, but CNC status is not one of them.
This entails the following: Your tax debts will be forgiven after ten years.
Yes, I'm serious. They just vanish with a poof.
If you live in Charlotte and owe taxes, it's critical to know when the 10-year term expires.
We can look up your IRS data and figure out the exact dates for you. Let's start with a conversation:
https://calendly.com/saragonzalez
We’re in your corner…
Warmly,
Sara Gonzalez
