Currently Not Collectible or Hardship Status is not really a total solution to an IRS Problem. Combined with an expiring Collection Statute or a Bankruptcy though it can be a truly powerful tool to use against the IRS collection machine. Essentially, once the IRS agrees that you have no ability to pay on a monthly basis they will place you into a holding pattern. Interest and penalties will continue to accrue but they won’t expect a monthly payment.
They can place a Currently Not Collectible case into two different statuses. One is semi-permanent and one is definite in time. They won’t tell you which one you are getting so it’s safe to assume that you will be in Currently Not Collectible status for 12 to 24 months at a time. Hardship status can be valuable breathing room to keep a Revenue Officer or ACS off your back long enough for you (or us) to figure out what the “ultimate” solution is. It’s always better to be in Hardship Status than not. So you have nothing to lose. Watch the video to learn how to get Hardship Status and what forms you will need to use to get it.