Legal Question in Tax Law in California

If I am in "uncollectible status" with the IRS, can they collect any money from me if I have made some?

My whole goal is to avoid any type of garnishment once I begin to make money again (which should be within the next 90 days). Is their anything that I can do now, to avoid this.

I also own taxes for the state of California as well. Is their something that I can do as well?

Asked on 12/13/11, 2:14 pm

1 Answer from Attorneys

Christian Montgomery Montgomery & Wetenkamp, Attorneys At Law

Generally, an Internal Revenue Service (IRS) Currently Not Collectible status will protect you from enforced collection actions, such as garnishments, while your account remains in Currently Not Collectible status. The Currently Not Collectible status can be removed if your financial situation improves and you have an ability to pay your IRS debt. However, the IRS will normally seek an updated financial statement from you before simply removing the Currently Not Collectible status. Therefore, it is important to not ignore IRS notices. Conversely, if your financial situation does not improve to where payments can be made, your account may remain on Currently Not Collectible status until the debt expires.

In regards to your specific situation, additional facts are needed to determine whether enforced collection action will be taken against you or whether your income will be levied. The state of California has a similar hardship status. However, it is usually for a limited amount of time, and must be updated at the end of the hardship term.

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Answered on 12/13/11, 3:44 pm

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