People think that getting a Currently Non Collectible for a resolution with the IRS is a good resolution because they’re not paying anything right now. Well, I’m here to tell you that for most people, this is one of the worst things that you can do. Especially if you have a home.

Let me tell you why. Currently Non Collectible means that they, the IRS, cannot collect, currently. This does not mean that you erased or wiped out the balance. In actuality, the balance remains and will continue to accrue interest and penalties.

The IRS also puts a lien on all 3 Fresh Start hardship programs they have. Offer in Compromise, Partial Payment Installment Agreement, and Currently Non Collectible. So when you get a CNC, the IRS will put a lien on your home if you own a home. Meaning, that if you sell the home, the IRS will get paid first to satisfy the lien placed on your home.

The IRS also checks your taxes on an annual basis to see if your financial situation has changed. So if your financial situation improves in the future and you can afford to make payments and pay your balance, the IRS will take you off the Currently Non Collectible and you will have to pay the WHOLE balance back, including the interest and penalties that accrue.

A currently non collectible resolution is good for someone who is on a fixed and/or limited income with no future aspects of making more money. It is good for someone who does not have a home. It is not good for someone who will be making more money in the future. It is not good for someone that has a home because when you pass away, the lien is still attached. If the person(s) who inherited the house decides to sell the house, the IRS will get paid first.

So a Currently Non Collectible resolution is not always the best option. At We Help Tax Relief, we think that a Partial Payment Installment Agreement might be a better way to eventually ELIMINATE your IRS resolution. But it all depends on your transcripts we pull from the IRS. There are many variables that will affect your resolution such as if you filed, when did you file, do you anticipate making more money, are you in a financial hardship, etc… Give us a call and we will help you get the right resolution for your situation. There is not a One-Size-Fits-All when it comes to the IRS. It depends on many factors. So let the experts help you make the right decision.