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  • Writer's pictureSean Sadeghi CPA, EA,

Los Angeles Tax Resolution: The IRS Tax Problems and Currently Not Collectible Status

The Internal Revenue Service (IRS) is the primary agency responsible for collecting taxes in the United States. When taxpayers are unable to pay their taxes, the IRS may take enforcement action to collect the debt, such as garnishing wages, levying bank accounts, or placing a lien on property. However, in some cases, the IRS may determine that a taxpayer is "currently not collectible" and temporarily halt collection efforts.


A taxpayer is considered "currently not collectible" if their financial situation is such that they are unable to pay their tax debt. This may occur when a taxpayer has limited income and high expenses, or when they are facing a financial hardship, such as unemployment or medical bills. In these cases, the IRS may agree to temporarily halt collection efforts to allow the taxpayer time to get back on their feet.


Being designated as "currently not collectible" does not mean that the tax debt has been forgiven, and interest and penalties will continue to accrue on the debt. The taxpayer remains responsible for paying the debt in full, and the IRS may resume collection efforts in the future when the taxpayer's financial situation improves.


It is important to note that being designated as "currently not collectible" is not a permanent solution to IRS tax problems, and taxpayers should take steps to resolve their tax debt as soon as possible. This may include negotiating a payment plan, applying for a loan to pay the debt in full, or seeking professional tax assistance.


If you are facing IRS tax problems and are unable to pay your debt, it is important to seek help as soon as possible. The IRS has a number of options available for taxpayers who are struggling to pay their taxes, and a qualified tax professional can help you understand your options and work with the IRS to resolve your tax debt.


In conclusion, the "currently not collectible" status is a temporary solution for taxpayers who are facing financial hardship and are unable to pay their tax debt. While it provides some relief from collection efforts, it is not a permanent solution and taxpayers should work to resolve their tax debt as soon as possible.

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