Accepted Answer

Hello noidea,

If you feel that you could not afford at this time to set up a payment plan with the IRS to pay off this debt, then you may apply for what is called "Currently Not Collectible" status.

Currently not collectible means that a taxpayer has no ability to pay his or her tax debts. The IRS can declare a taxpayer "currently not collectible," after the IRS receives evidence that a taxpayer has no ability to pay.

Such evidence is usually obtained from the taxpayer on IRS Form 433-F, Collection Information Statement. A taxpayer can request "currently not collectible" status by submitting Form 433-F to an IRS Revenue Officer or the IRS Automated Collection System unit.

Once the IRS declares a taxpayer currently not collectible, the IRS must stop all collection activities, including levies and garnishments. The IRS must send an annual statement to the taxpayer stating the amount of tax still owed. This annual statement is not a bill.

 

While in not collectible status, the 10-year statute of limitations on tax debt collection is still running. If the IRS cannot collect the tax within the 10-year statutory period, then the tax debts will expire.

 

My suggestin would be that you start by filing for this not collectible status. If the IRS does not accept your application, then you would have to try other means such as setting up a payment plan or submitting an Offer in Compromise to try and settle the taxes owed for a lower amount. But I would suggest starting out by seeing if you can qualify for the "Currently Not Collectible" status.

 

If this was helpful please press the Accept button. Positive feedback is also appreciated.

 

Thank you noidea and best of luck to you in getting this resolved.

 

 

 

Expert:	Merlo
Pos. Feedback:	99.8 %
Accepts:
Answered:	10/29/2009

Accountant

25+ years tax consulting. Specializing in returns for US citizens living abroad