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What to Do If You Have a “Currently Not Collectible” IRS Status

What to Do If You Have a “Currently Not Collectible” IRS Status

By on Jun 27, 2018 in Credit Score, IRS, Tax relief | 0 comments

When taxpayers start looking into the process of resolving an Internal Revenue Service (IRS) tax debt situation, they may find themselves confused by the often complex and sometimes confusing array of codes and options that are involved. One of the most confusing options is perhaps the most powerful tool that you and your tax debt relief advocate have at your disposal, the Currently Not Collectable status. Let’s take a few minutes to quickly talk about what CNC is, who qualifies, and what you can do if you are able to get assessed as currently not collectible. What is Currently Collectable Status? To put it in the simplest terms, Currently Not Collectable Status or CNCS, is a form of deferment that is offered by the IRS for some taxpayers who currently are not in the financial position to make payments toward their tax debt without having such payments placed upon them, their families, or their business undue and extreme hardship. CNC status is often applied to a taxpayer for a period of one year and can be extended several times if necessary. It is often used as a way to reduce or eliminate a back tax debt, or at the very least to help the taxpayer prepare for the process of making payments. While the taxpayer is in CNC status, the IRS cannot garnish wages, levy a lien against property or bank accounts, seize assets, or undertake many other types of aggressive collection actions. They may still pursue several other types of action, however, and you are required to stay in compliance with a wide range of rules or your CNC status could be revoked. These rules generally involved not establishing large lines of credit, not purchasing new assets, and not investing in many ways. Who Can Qualify for CNC Status? Most people who have a substantial tax debt situation may qualify for CNC status. The process is fairly straightforward and involves a simple declaration of your financial and property assets that will be confirmed and examined by the IRS. There are many rules that apply to what assets can and cannot be counted toward your financial position. For example, retirement savings, children’s college funds, the value of your primary...

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How Can a Federal Tax Lien Affect Your Credit Score?

How Can a Federal Tax Lien Affect Your Credit Score?

By on Jan 15, 2018 in Credit Score, Filing Taxes, Tax | 0 comments

A loan can come in handy if you’re low on cash and need to pay for something right away. It also helps to pay for big purchases such as a house or car. Receiving a loan isn’t a hard process. However, it could be if you have bad credit. If you have a tax debt,you might have received a federal tax lien. A tax lien can have a negative impact on your credit score.   What is a Credit Score? A credit score is a specific number that is calculated based on information in a credit report. Every time you take out a loan or make a loan payment, it is recorded on your credit report. The leading credit score in the industry is FICO and ranges between 300-850. Your credit score determines how likely you are to get approved for a loan or not. It’s important to know that your credit score will follow you forever, and may affect your finances negatively or positively.    Why is a Good Credit Score Important?  Before you buy a house, sign a lease to rent an apartment or even apply for a credit card, your credit score will be checked. A good credit score indicates if you’re a trustworthy borrower or not, and can result in interest rate savings as well.   How Can a Tax Lien Affect My Credit Score? Someone who has an outstanding tax debt receives a federal tax lien by The Internal Revenue Service (IRS). A tax lien gives the IRS the right to claim certain property such as homes, cars, buildings, equipment, jewelry, money etc. The taxpayer is given 10 days after a letter is sent to follow-up with the intent to repay debt. If the taxpayer refuses to pay before the 10 days are up, a Notice of Federal Tax Lien is sent to creditors to inform them that the IRS has the right to possess taxpayer’s property.A federal tax lien can decrease your credit score, making it difficult to receive loans in the future. The best way to avoid this is to not have a tax lien in the first place because once it’s listed in your credit file it becomes public record. Regardless...

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