FAQ – Currently Not Collectible

What is currently not collectible status?

Currently not collectible status is a policy by the IRS to not collect taxes.  The IRS policy says that the IRS can suspend collection activity if there is no reasonable prospect for collections.  The IRS applies its collection rules in making this determination.  

Does currently not collectible status mean my taxes are forgiven?

No, currently not collectible status does not mean your taxes are forgiven.  It simply means that the IRS is agreeing to temporarily suspend collection activity. 

Does currently not collectible status suspend the accrual of penalties and interest?

No, currently not collectible status does not suspend the accrual of penalties or interest.  Penalties and interest will continue to accrue.

Will the IRS continue collections at some point?

Maybe.  The IRS computer system will match your income as reported by you and by third parties to see if your financial circumstances have changed.  It may also periodically review or change your currently not collectible status.  With that said, there are instances where the IRS never changes the status or attempts to collect the taxes.