We deal with many clients in Winchester, VA, and the surrounding area that have tax debt. If you owe money to the IRS and have not done anything about it, the IRS may issue a letter saying they intend to levy your bank account or garnish your wages. What can you do if this levy or wage garnishment creates / or will create significant financial hardship?
We suggest you discuss the situation with a tax resolution specialist. If you do not feel you have the ability to pay, ask if you qualify to have your account placed in a status called, “Currently Not Collectible” or “Uncollectible”.
Uncollectible is based on your ability to pay. You will need to complete a Collection Information Statement and send it to the IRS. In the Collection Information Statement you will need to enter all of your assets like bank accounts, real estate, retirement accounts, stocks, etc. You will also enter all sources of income and all of your expenses. Important to note with the expenses that the IRS will only allow certain standard allowable amounts. The IRS publishes the national and local standards amounts and updates them annually. Based on the Collection Information Statement (Form 433-A, Form 433-B or Form 433-F depending on your situation and which agency of the IRS you are dealing with), the IRS will make the final determination if they feel you have the ability to pay.
Uncollectible doesn’t actually resolve the tax issue, but it does mean the IRS will not take action against either the taxpayer’s assets or income. In some cases, Uncollectible can be used as a temporary strategy to buy time until another resolution option can be worked out. When the account is deemed uncollectible, the case is temporarily closed with the collections unit of the IRS; however, you still owe the money. Also, since you still owe the money, the IRS will continue to add penalties and interest to your account and it will be subject to other adjustments and offsets such as applying future tax refunds to the amount you owe.
Even though the IRS will not demand payment, it is in your best interest to make voluntary payments, if possible, to the amounts you owe so that you minimize additional penalties and interest. Also, be aware that the IRS may re-open your case at a later date if your financial situation improves.
At Tax Debt Resolution Services of Winchester VA, our mission is to help you eliminate your IRS issues and the stress the IRS has created in your life and help you get back to doing what you do best! We help our clients in Winchester VA, Strasburg VA, Martinsburg WV and Charles Town WV to resolve their tax debts!. If you need assistance please feel free to contact me at 540-300-1988 or email@example.com.