As a caregiver for your loved one, you may find they have past-due federal income taxes they cannot afford to pay. If you determine that after payment of the costs of care there simply are insufficient funds to pay of the obligation to the IRS, you may be able to apply for “Currently Not Collectible Status¨ with the IRS. The debt can remain in currently not collectible status as long as the person cannot afford monthly payments. The IRS will review the accounts once each year to see if you are able to start making payments. If your loved one is still unable to make monthly payments, the IRS will keep the accounts in currently not collectible status.
Qualifying for Currently Not Collectible Status. To qualify, the taxpayer must have filed tax returns for all the years in which he or she was required to file taxes. In addition, you will need to provide documentation to the IRS to establish that the person would have little or no money left over every month after paying essential living expenses such as rent, utilities, and groceries.
Does the tax obligation disappear? No, the benefit is that the IRS will hold off on collecting past due taxes. They won’t request that the person set up an installment agreement, and they won’t try to garnish their wages or levy their bank accounts. However, they retain the right upon the taxpayer’s passing to seek recovery of the debt.
How is Currently Not Collectible Status be applied for? You can request currently not collectible status by calling the IRS with your income and expense information. An IRS representative will take your information over the telephone and place your accounts into currently not collectible status. Please have all your income and expense information with you when you call. You should also write down the IRS representative’s name and badge number so you can remember who you talked with about your taxes. You can also fill out IRS Form 433-A and send it to the IRS with a letter requesting currently not collectible status. The letter should explain why you are unable to make monthly payments towards your tax debt. Send your request to the IRS at the address provided on the last letter that you received from the IRS.
For more information about the currently not collectible status, you may contact the Taxpayer Advocate Service (“TAS”) at https://taxpayeradvocate.irs.gov TAS is an independent organization within the IRS. Their job is to ensure that every taxpayer is treated fairly and that you know and understand your rights.
For more than 30 years, Attorney Lee A. Drizin has practiced in the areas of estate planning, probate, trusts, guardianship and real estate matters representing clients throughout the state of Nevada.
Drizin Law is providing this information for educational purposes only. It should not be construed as legal advice or a legal opinion as to any specific facts or circumstances. This information is based on general principles of Nevada law at the time it was created and you should be aware laws frequently change. Moreover, the laws affecting you may differ depending on the circumstances. You should consult with a qualified attorney in your own state or jurisdiction concerning your particular situation. Review of this information does not create an attorney-client relationship.