There is a status known as Currently Not Collectible in IRS law. Your account can be placed on Currently Not Collectible when the IRS finds out that you are unable to pay in full, or by Installment Agreement or by an Offer In Compromise. When you are placed on

Currently Not Collectible status, the IRS will no longer try to collect. Plus, the statute of limitations on the past due tax will continue to run-a good thing for you.

Unless your finances change dramatically, your account will remain on a Currently Not Collectible status until the overdue tax time limit runs out. However, if your finances get much better, your account will be taken off of Currently Not Collectible status. Then the IRS can collect the taxes through full payment or an Installment Agreement or through some other tool. When you have a zero cash flow and when you require the use of your property in order to survive, that is a good time to try for a Currently Not Collectible status. This means that for some reason a piece of your property could not reasonably be sold or the sale of it would cause a hardship to you.

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