Have Tax Questions? Ask a Tax Expert for Answers ASAP
First of all, yes, if you have been determined uncollecable by the IRS, then you would be a good candidate for an offer in compromise.
With the determination of uncollectable status, the IRS will leave you alone for at lest 12 months, but the tax debt remains on the books. The IRS can re-open the account at anytime, and if your financial situation improves continue with collection activities. They do this if you have shown that or it is determined that the tax debt is uncollectable due to current financial circumstances. You are still expected to pay the tax debt when your situation improves. This makes you a good candidate to hire a tax attorney to help you file an offer in compromise.
Those tax liens may become uncollectable in terms of active collection activities as the statutes of limitation expire. However the tax liens will remain no the record until the debt is paid.
So even though they may not come knocking on the door, those leins will appear in the credit report indefinately; and creditors will see them, which may limit your ability to acquire credit in some circumstances.
The IRS leins may be a different matter. The issue here is that if you are at the stage of being determined uncollectable, you or your husband, may have at some point, perhaps not even realizing it, signed a document with the IRS agreeing to waiver the statute of limitations. This is why the IRS can come after you later when you get into a better situation financially.
I would like you to see your nearest Low Income Tax Assitance CLinic. These clinics are free to you or charge a very low fee. They receive grants from congress and matching grants from the IRS to provide you free or very low cost legal tax assistance.
Simply open the document that appears at the following link. Then scroll to Maryland in the chart that appears there. You can find the address and phone number to the one that is located nearest you:
One of their mission statements is to help file offers in compromise.