Don’t Qualify for an Offer? Try CNC Status!
I hope you have managed to stay safe and well! We focus on resolving tax issues in Prince William County and throughout the lower Northern Virginia area.
We know Offers-In-Compromise are all the rage Nowadays. Why between the commercials on radio stations, the late night commercials “We settled our $500K tax bill for just $5.51”, and the junk mail you receive after a Notice of Federal Tax Lien (NFTL) has been filed against your property (FYI, statutorily speaking, a lien goes into effect at the moment of tax assessment for any taxpayer, regardless of the amount or the date of the obligation to the IRS. The NFTL is just letting everyone in on the fact). Everyone feels that it is their absolute right to settle their tax obligations for little or next to nothing. Unfortunately, this couldn’t be further from the truth. You do not have a given right to an offer. There we said it.
So, if your RCP is too high and shows that you are able to full pay, alternatively, you can seek to have yourself declared “Currently Not Collectible” or CNC. Here are a few reasons to have yourself declared CNC, even if you’re currently unable to qualify to make an offer that the IRS is likely to accept (remember anyone has the right to make an offer to the IRS to settle their tax obligation, however, Internal Revenue can and will declare via letter that accepting your offer would not be in the public’s best interest. Meanwhile, you’re now out of $205 for the application fee, plus either 20% of the offer being made or your first month’s installment):
- If the CSED will expire soon. If the CSED is expiring being declared CNC Status will allow the statute to continue to run, while, filing an offer will “toll” or stop the statute
- You are unable to get into compliance right this moment and need more time to gather the necessary information to get yourself into compliance.
- Your RCP will not allow you to qualify for an offer that will be accepted or you have dissipated assets and should have used those items to satisfy your obligation with the IRS.
While, CNC Status does not resolve your tax issue or obligation, it prevents the IRS from levying your assets, protecting you while you’re able to come up with a solution to resolve the problem. Have the 433s prepared and ready to submit when you’re negotiating to be considered “Currently Not Collectible”
If ever you’re feeling overwhelmed or you’d rather be doing something else with your time, just remember we’re here to help you with all of your tax preparation, resolution/representation needs. Now and in the future. Don’t put off addressing your tax situation. Feel free to contact us with any questions you may have in approaching your specific tax scenario.