Financial issues can have far-reaching effects, and any New York resident could feel those effects in various areas of his or her life. Money problems can cause mental and physical health concerns, and when individuals are facing tax collection on top of their other debt issues, they may feel even more overwhelmed. Fortunately, some people may be able to take advantage of assistance with collection efforts.
If parties are facing financial issues in which they cannot pay their outstanding tax debt and handle basic living expenses, they may qualify for Currently Not Collectible status with the IRS. This CNC status can delay collection efforts and can prevent income from being levied. Of course, individuals interested in obtaining this status would need to request it from the IRS, which would conduct an assessment to determine whether it could apply.
It is important to remember that even while collection efforts are delayed, interest and other penalties for nonpayment are still being applied to the owed amount. A taxpayer may also need to file current and past due tax returns before the IRS will approve the CNC status. The IRS will also review the person’s financial situation each year, and if it has improved, collection efforts may resume.
It can be stressful dealing with the IRS in any capacity, and if New York residents are having trouble paying their tax debt, they may worry about collection efforts. Though CNC status may seem like a viable option, it may not be the only avenue available for individuals facing this ordeal. It may be worthwhile for struggling taxpayers to consult with tax law attorneys about their options.