IRS non-collectible status? Good news, not really.

I talk to many people who have achieved non-collectible status with the IRS collection process and they celebrate, seemingly enjoying a victory. I guess it s a victory of sorts, a least they will not be bothering you with collection and or liquidation procedures for a while, but what does it really mean?

It means you have a life time to deal with this issue as it may be dormant but it did not go away.

It may feel as though you have won, no more threatening letters, phone calls or collection efforts, but has it really ‘gone away’.

A resounding NO!

It has been put into the computer as noncollectable and thus taken out of the active files.

BUT IT IS STILL THERE WAITING FOR YOU TO DO SOMETHING TO AWAKEN THE SLEEPING GIANT.

Any publicly recorded event, any attempt to get a loan, sell a home, buy or register a car,  will awaken the giant who will then appear in all its glory and power and resume the collection process.

So, if you plan on living under a rock for the rest of your life, noncollectable status is fine, fine, for a street person. If you have any intention of doing anything productive with your life, this issue must be dealt with and concluded for once and for all, as noncollectable status is a long term death wish not salvation.

A much better approach is an Offer to Compromise, especially following  noncollectable status as the service has already determined  you have no assets or capability to pay, what an opportunity to wipe out the debt all together, for ever.

So celebrate for one evening and then get to work the next day  filing your application for an Offer in Compromise. That is a plan that works.