Do you owe money to the IRS that you cannot pay?

Posted on April 25, 2012

What do you do if you owe money to the IRS but cannot make any payments because your income has gone down? One of our clients owes over $100,000.00 to the IRS but recently lost his high paying job. Because of the economy, the only job he could find paid really poorly. Because of the reduced income, he could barely pay his food and rent, let alone make payments to the IRS. However, because of his recent greater income, the IRS would not cut a deal (Offer in Compromise) on the unpaid liability thinking that he may get a higher paying job in the future. We negotiated “currently not collectible” status for our client today where the IRS agreed to leave our client alone for a period of time to allow him to get back on his feet. Under “currently not collectible”, NO payments are made to the IRS. Although they will keep his refunds, the IRS won