If you owe back taxes, you likely have considerable stress regarding this issue. Whether you recently received a letter from the IRS or you have dealt with unpaid taxes for years, it is pivotal to explore all of your options and address this debt properly.
If you cannot pay back taxes due to financial challenges, you could qualify for Currently Not Collectible (CNC) status. It is crucial to take a careful look at how CNC status works, and you should familiarize yourself with Form 433-F.
Assets, income and Form 433-F
According to the Internal Revenue Service, Form 433-F helps the IRS gather financial data that allows the agency to determine whether an individual can pay back taxes. Sometimes, those who want to secure CNC status have to complete this form, and it is vital to go over Form 433-F before calling the IRS.
Form 433-F asks for information about your personal bank accounts (including PayPal), investments, credit cards and cryptocurrency. In addition, this form requires that you report if you own any real estate or other assets, such as vehicles and boats. When completing Form 433-F, you will need to provide information regarding a business you own, self-employment income, rental income and wages you earn as an employee, if applicable.
Expenses to include on Form 433-F
After addressing your assets and income, you need to provide information on your monthly living expenses. Form 433-F asks for your expenses related to housing and personal care, transportation, utilities and medical needs. Child support obligations, child care, alimony and other expenses also affect your eligibility to secure CNC status.
If you cannot afford to pay back taxes and want to pursue CNC status, it is vital to review Form 433-F and carefully prepare before reaching out to the IRS to avoid mistakes that could lead to delays.