Currently Not Collectible is a program offered by the IRS for taxpayers experiencing economic hardship. This status means that the IRS will, for the time being, stop any collection action until the taxpayer’s situation improves.
There is no standard threshold to qualify for the Currently Not Collectible program, as there are numerous ways that a person can qualify. However, the typical Currently Not Collectible taxpayer usually is:
Unemployed or on a fixed income.
Sick or seriously ill and unable to work.
Unable to meet all of their current necessary monthly expenses.
Has little to no assets or equity that could serve as repayment of the tax debt.
If a taxpayer is accepted into the Currently Not Collectible program, the IRS will review their financial circumstances periodically. If the IRS sees that the taxpayer’s ability to pay has changed, the status of Currently Not Collectible will be reviewed.
Circumstances that may qualify for the revocation of a Currently Not Collectible status include:
Returning to work
Receiving a raise or promotion
Recovering from an illness
Failing to file and pay taxes
The Currently Not Collectible program does not prevent a Federal Tax Lien from being filed by the IRS, as well as it does not extend the Statute of Limitations a taxpayer has to pay the federal tax debt.