Currently Not Collectible IRS Status 53

Currently Not Collectible

If all of your past tax returns are filed, you have stopped pyramiding taxes and have furnished the IRS with all the applicable financial data, you may be eligible to have your tax debt placed in a currently not collectible status.

This is a temporary delay in enforced collection action (from tax levies, bank levies, wage garnishments, etc.) until your financial condition improves. The IRS coded currently not collectible as “Status 53”. This code tells everyone in the IRS that it is not worth their time to pursue collection action due to lack of equity and income.

Typically the IRS will look at your financial situation every year to review your ability to pay the back tax debt. If after their review they determine you are making substantially more income will once again pursue enforced collection action such as bank levies and wage garnishments.

If the IRS determines that your financial condition has not improved they may still file a Notice of Federal Tax Lien to protect the government’s interest in all of your assets. The other drawback to this tax debt strategy is that penalties and interest are continuing to accrue.

I was successfully able to have this client's business account placed into uncollectible status after being on the case for less than 30 days (started July 15th and had the case in uncollectible status by August 5th) after pushing the Revenue Officer and the Taxpayer Advocate to approve the uncollectible status due to the client's bank demanding the case be resolved before my client's home was foreclosed upon (qualified for a loan modification under Obama's HAMP Program).

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