What is Non-Collectible Status?

This is a situation where the taxpayer can demonstrate that paying the IRS constitutes an “economic hardship”. To be placed in non-collectible status the monthly “IRS Allowable” expenses must exceed monthly income on Form 433-A or 433-F.

It is important to understand what the IRS allows as an expense and how much the IRS allows for each expense. It is also important to understand that this is usually just a temporary solution. The IRS can reassess the individual’s ability to pay at a later date. Contact us to help you determine if you qualify for this solution.

Offers in Compromise (also referred to as the ‘Fresh Start Program’ or ‘Initiative by national companies’) are the most advertised and least accepted IRS solution. On October 25, 2004, the IRS issued a consumer alert advising taxpayers to beware of anyone claiming settlement of tax debts for “pennies on the dollar” through what is called the Offer in Compromise Program. Because most Offers in Compromise are filed by companies who make these promises, more than 90% of all Offers in Compromise filed in the U.S. are rejected by the IRS.