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Tax Audit CPA discusses Currently Not Collectible IRS status | IRS Tax Form 433-F and Form CP-71 | IRS tax problems

tax audit cpa discusses Currently Not Collectible IRS status and Forms 433-F and CP-71

The IRS has a Not Currently Collectible account status. It can buy some time. If you like what you read, consider calling for a free phone consult at (910) 399-2705. Our virtual office allows us to offer CPA services regardless of where you live.

Tax audit CPAs have tools available to help their Clients with tax problems, even if the IRS wins a few rounds. One technique is getting you, or your company, classified as a “Not Currently Collectible” account, usually accomplished by filing IRS Form 433-F, Collection Information Statement. “Not Currently Collectible” puts you into an IRS limbo where both parties recognize taxes are due, but there’s no way to pay at the moment. The Form 433-F instructions are pretty good. Then the IRS sends you an annual tax Form CP-71 as a reminder that you have unpaid taxes. I caution you to watch any back State taxes due as well, they’re sometimes not as patient.

Why would a tax audit CPA file IRS tax Form 433-F?

Form 433-F buys you time. Even without IRS Form 433-F, the IRS is good about allowing more time once a engage a tax audit CPA accountant. But I’m talking several months here instead of the long-term hiatus of Currently Not Collectible status. In my experience, CPAs don’t file Form 433-F without intending to use other tactics to fight the tax amount due or facilitate the tax payment process. I see tax Form 433-F and Currently Not Collectible status as tactical retreat while we re-group to mount other strategies. However, say for older person living off Social Security, the Not Currently Collectible could be for life. Here are some approaches a tax audit CPA might take on a typical case while you’re Not Currently Collectible status:

  • Fight the IRS on the amount owed. For example, if you have unfiled back taxes, just filing correct tax returns should lower the amount due to the IRS. I’d help you piece together the required information and cross correlate it against what the IRS has on record. I’ve seen multiple cases where the IRS tax audit turns into a client refund.
  • Offer in Compromise: IRS Form 656. Here you agree that you owe the IRS taxes. But now you’re asking for a reduction because you simply can’t pay the amount in full. The IRS relaxed the standards for an Offer in Compromise as part of their Fresh Start program. It isn’t costly to check if you’re qualified.
  • Installment Agreement: Form 9465. This is a monthly payment plan with the IRS. Their Fresh Start program relaxed requirements for their “payment plans” too.

“Be careful when filing Form 433-F. Don’t expose yourself to additional IRS scrutiny.” 
– Gary Bode, tax audit CPA

What happens if you get Not Currently Collectible status? Form CP-71?

Well the IRS has to remind you annually that you have unpaid taxes. That’s what the Form CP-71 does. There are other versions of CP-71, like CP-71A, CP-71C and CP-71D. You have to keep the IRS updated to keep your Not Currently Collectible status. Read it carefully or pay a CPA to check it for you. Compliance is crucial to maintaining IRS Not Currently Collectible status.

“Remember that if you’re filing IRS Form 433-F, State tax issues  exist too.”
– Gary Bode, tax audit CPA

State Tax Issues

Most states that required an income tax return relay on the IRS for information. So there’s a delay with your State tax problems. I think most tax audit CPAs plan for this contingency. Why? A CPA’s options become limited if the State shows up early.

What’s a IRS Tax Audit CPA?

I think of myself as an IRS tax problem preventionist. So I think being an IRS tax audit CPA is a state of mind. I’m there to play the whole game for you. Folks just engage me at various stages of their IRS tax problem.

I’m a tax audit CPA with a virtual office. We file back taxes, make Offers in Compromise and file Form 433-F. For a free phone consult call (910) 399-2705.

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