IRS Currently Not Collectible

The IRS will consider a taxpayer’s current financial situation when determining whether they should be required to make payments toward an outstanding tax debt. If a review of the monthly household income and expenses of the taxpayer suggests that they do not have excess monthly income and making a payment to the IRS would cause a hardship, the IRS will allow their account to be placed in not collectible status. While in not collectible status, the IRS will not pursue enforcement action such as bank levies or wage garnishment, the statute of limitations continues to run (tax liabilities generally expire after ten years), and the taxpayer is not expected to make any payments toward the debt for a period of at least two years. After this time, the IRS may periodically review the account and the taxpayer may be required to start making payments if their circumstances have changed.