Do You Owe Money to the IRS But Can’t Pay?
November 21, 2022
Try These Steps
When you owe back taxes and can’t afford to make any payments, then it may be time for a special tax status known as currently not collectible. This means that your debt is still considered valid even though there's no chance at recovery right now. When you’re approved for currently not collectible
status, the IRS can no longer garnish your wages or seize any property.
Now, don't forget about these debts because the IRS is still looking for payment.
What is Currently Not Collectible Status?
The IRS will place your account in currently not collectible
status if you cannot pay both back taxes and reasonable living expenses. You may request this by submitting the proper form with documentation that proves how much income you have left over that is available to make a payment, along with any assets that have been sold recently to cover mounting debts - like homes!
To qualify for the currently not collectible
status, you will need to put together a case that you will present to the IRS. Gather copies of your bills, proof of your income (pay stubs, bank statements, alimony, etc.), and your investments. It is important to document your inability to pay so that if the IRS determines you cannot afford your necessary expenses, it can grant you status.
When dealing with the IRS, it is best to have a professional in your corner. The IRS can be very intimidating and might ask invasive questions that could land you deeper into trouble than before if you do not know how to answer properly. Remember – the IRS is not a friend of yours; its job entails collecting what they believe you owe them so make sure any interaction stays as simple and effective as possible. That is why it is crucial to reach out for help
from one of our tax resolution specialists.
Temporary Solution
If your status is approved, it does not mean you do not have to file your current and future taxes. This status only applies to your back taxes that the IRS is looking to collect. The currently not collectible
status is simply a band aid to help you get back on your feet. That way you can put yourself in a better position to make a payment in the future. The IRS may review your status every year or two if it looks like there is potential for repayment. You will only be able to keep the status active if you still cannot make a payment on your back taxes.
Statute of Limitations
The IRS is an institution that prides itself on being collections oriented. It will try to collect outstanding taxes for only 10 years from the date it was assessed against you. Once the 10 years is up, the IRS can no longer collect the back taxes. This also applies if you have the currently not collectible
status. If you do not have the status, or are in an installment agreement, or have an offer in compromise pending, the IRS can garnish wages and add more penalties to your case making things worse for you as well as your wallet.
In today's tough economic climate, many families are struggling to make ends meet. If you are worried about the IRS garnishing your wages or levying bank accounts or filing liens against your property for non-payment of taxes you owe, then reaching out may give you some peace of mind.
Our firm will help explain all options available in order to relieve any anxiety associated with these situations because we know how intimidating this can be if nothing has been done before. There is a solution to every IRS problem. Connect with one of our tax resolution specialists
to see if you qualify for the currently not collectible
status, or any of the other IRS settlement options you may be eligible for and the best next steps for your situation.
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Tax season started in late January, but the IRS’s latest statistics show that many Americans are still waiting to file their taxes. As of February 7, 7.7% fewer tax returns have been received by the agency compared to a similar time frame last year, according to its latest data release. While the IRS expects filing numbers to even out, the IRS.gov website has experienced a 40% decline in visits this year to date over last year. Francine Lipman, CPA, a tax law professor at the University of Nevada, Las Vegas, says the reasons could be endless but probably come down to simple procrastination. “Despite all the Super Bowl ads, I don’t believe that tax issues are on people’s radar yet,” adds Lipman. This is surprising considering the political climate, says Jordan Rippy, an accounting professor at Johns Hopkins University’s Carey Business School, who expected to see an uptick in returns filed this year. “Given the general climate surrounding the new administration, I would have expected more anxiety in the general population and a desire to receive refunds more quickly,” she tells Fortune. Elon Musk’s Department of Government Efficiency (DOGE) reportedly visited the IRS on Thursday to begin analyzing the agency’s operations. Senator Ron Wyden (D-OR), ranking member of the Senate Finance Committee, later posted on X that “if your refund is delayed, they could very well be the reason.” Average tax refunds are higher this year so far The rise in electronic filing is one of the biggest changes to the tax system in the last decade. With over 90% of individual taxpayers now filing their returns online, the process has become easier to handle for many Americans. But taxpayers still miss out on over $7 billion in underclaimed and unclaimed tax credits and deductions each year. In the 2025 tax season to date, tax filers have received a 18.6% increase in their average refund amount ($2,065) compared to this time last year ($1,741). The IRS cautions this isn’t a perfect indicator of the final trend in tax refunds, since it’s early in the season. The agency says most refunds are issued within 21 days. In the final analysis, the average refund last year was around $3,138. Compared to 10 years prior, last year’s average rebate was down nearly 30% on an inflation-adjusted basis. Rippy says she is surprised that average tax refunds have not decreased more as Americans realize they can adjust their withholdings and get more money per paycheck throughout the year. “If you receive a large tax refund, what you've essentially done is given a loan to the government over the last year that you didn't have to give them, and you've done that interest-free,” says Rippy. At the same time, she admits that the fact that many Americans expect a big refund year after year is a good thing, as it’s a form of forced savings. While many end up saving their refund, others use it to pay down debt, make a home improvement, or go on vacation. Need help filing your taxes or having issues with the IRS? Receive your free consultation from Advantage Tax Relief today! https://www.advantagetaxrelief.net/request-form or by calling (630) 773-3200.
If you’re dealing with IRS wage garnishment, it can feel like you're trapped in a difficult situation. The IRS can take a portion of your paycheck to satisfy your tax debt, causing serious financial strain. However, you do not have to face this alone. There are steps you can take to stop garnishment and restore control over your finances. This guide will help you understand what wage garnishment is, why it happens, and what actions you can take to end it. Understanding IRS Wage Garnishment Wage garnishment is a legal tool used by the IRS to collect unpaid taxes. Unlike many other types of debt collection, the IRS does not need a court order to garnish your wages. They will send you a Final Notice of Intent to Levy before initiating garnishment, and if you don't act, they will take a portion of your paycheck to pay off your tax debt. How Wage Garnishment Affects You Wage garnishment can create numerous challenges, including: - Loss of Income: With part of your wages withheld, it can be difficult to meet daily living expenses. - Damage to Your Credit: Unresolved tax debts and garnishments can hurt your credit rating, making it difficult to obtain loans or secure favorable financing terms in the future. - Stress and Emotional Toll: The financial pressure can create stress, affecting your mental health and relationships. Professional Impact: If colleagues find out about the garnishment, it could affect your reputation at work. Steps to Take to Stop IRS Wage Garnishment If you’re facing wage garnishment, take action quickly to put an end to it: 1. Respond to IRS Notices Immediately If you receive any IRS notice about garnishment, it's vital to act quickly. Ignoring it will only escalate the situation. Contact the IRS and request a Collection Due Process hearing where you can address the garnishment. 2. Explore Payment Plans and Agreements The IRS offers various options to settle your debt, such as installment agreements or an Offer in Compromise (OIC). These options allow you to repay your debt over time or settle it for less than what you owe. 3. Apply for Hardship Relief If the garnishment is putting you in financial distress, you may qualify for a hardship exemption, which can temporarily stop the garnishment while you work out a solution. 4. Contest the Tax Debt If you believe the IRS has made a mistake in assessing your tax debt, you have the right to dispute it. During this dispute process, garnishment can be put on hold until the matter is resolved. 5. Seek Professional Help Dealing with the IRS alone can be overwhelming. A skilled tax professional can help you navigate the complex process, negotiate with the IRS, and secure the best possible resolution for your situation. Why You Should Work with Advantage Tax Relief The process of stopping IRS wage garnishment requires specialized knowledge and experience. Advantage Tax Relief, located in Itasca, IL, offers over a decade of experience in tax resolution. Their team of experts knows how to work with the IRS to resolve wage garnishment issues and put together a personalized plan for you. Working with Advantage Tax Relief means having a dedicated partner who understands the nuances of IRS procedures and will advocate on your behalf to reach a favorable resolution. Their team will help you explore all options, including negotiating payment plans, filing for hardship relief, or contesting tax assessments. Take Action Today Don’t let wage garnishment control your life. Contact Advantage Tax Relief in Itasca, IL at 630-773-3200 for a consultation. Their team is ready to guide you through this process, offering the help you need to regain control of your finances and find relief from the IRS.
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