IRS Tax Debt and Disability: Know Your Solutions

You’re Trapped! If you’re in a spot where you can’t work, the last thing you want to worry about is IRS tax debt. You have enough on your mind without having to think about how much you owe or how you’re going to pay it. Not only are you dealing with medical bills and physical issues, but only getting a disability check is making paying the bills a little harder than usual as well. Unfortunately, the IRS doesn’t have a soft spot for those on disability. But if an IRS Hitman is banging on your door, here’s what to do:
Get Them Off Your Back! One of the best things to do in this situation is apply for Currently Not Collectible status. This means almost exactly what it says. This states that extenuating circumstances are preventing you from paying the debt. Provided they accept the agreement, the IRS will stop all collection activity against you. When you submit the application, the IRS reviews your financial records thoroughly in an attempt to prove you wrong.

Can I Qualify? In my years as a Hitman, the biggest reason the IRS rejects a case is because the submitter has no idea what they were doing. You want to be positive that you can qualify because if even one detail is incorrect, the IRS will assume you were trying to scam them and will attack you with full force. They can garnish up to 15% of your disability check, making finances even harder on you. The best way to avoid this is to seek help from a reliable, knowledgeable tax professional.
Going Back to Work: If and when you go back to work, the Currently Not Collectible status remains in effect. This way you can get back to work with a little peace of mind. However, once you go into CNC, the IRS does a follow up on your finances each year. Keep in mind that if they discover that you’re back in financial swing, they can pick up right where they left off.
What About Permanent Disability? If you have a permanent disability, your case stays in a status of CNC until the IRS Statute of Limitations (usually 10 years after a debt is assessed) expires. Your disability has made your life hard enough. You want to have a normal life and the IRS Hitmen shouldn’t be a part of it.
Now you have the smoking gun…Use it!