Helping You With Your Tax Obligations When You Cannot Pay

Individuals and businesses with unpaid tax liabilities can have difficulties keeping up with current tax obligation while also making payments toward obligations from previous years. In these instances, the IRS may allow the taxpayer’s account to be put into a temporary Currently Not Collectible status (“CNC status”).

Under the CNC status designation, a taxpayer is unable to pay current taxes as well as basic, necessary expenses. If so granted, the IRS will not attempt to collect the taxpayer’s outstanding liabilities for a period of time. While the taxpayer would not be required to pay the outstanding debt, penalties and interest will continue to accrue.

Individuals Owing Back Taxes

An individual taxpayer will only qualify for CNC status if they are in current filing and payment compliance and if we can show that their income cannot support their “necessary expenses.” We help our clients get into and stay in compliance and, when appropriate, present their circumstances to the IRS in the most favorable light in order to be granted CNC status.

Businesses Tax Issues

CNC status can be a consideration for both businesses that are currently still operating (“in-business taxpayer”) and businesses that have closed. The analysis of whether a company qualifies for CNC status will depend on individual facts and circumstances.

Periodic Review

While under CNC status, the IRS will review the taxpayer’s payment ability periodically and/or when an income tax return is filed. At any of these times, the IRS will look at any increase in income and determine whether the taxpayer will continue to qualify for CNC status. We will be there for you when the IRS conducts their period review to ensure that all issues are considered and you are not needlessly removed from CNC status.

It is important also to know that the IRS will file a federal tax lien to protect its interest while penalties and interest continue to accrue on the debt.

Contact Us When Tax Authorities Are Knocking At The Door

When you are facing substantial tax debt, the lawyers of Kundra & Associates can help you make sense of the situation and secure the status needed to give you time to pursue an appropriate long-term resolution. To schedule an initial consultation with a Maryland tax attorney, call 301-637-8130 or contact us online.