Many clients that come to JK Harris seeking resolution for their tax issues are enduring some type of financial hardship. Sometimes it is the tax liability they owe that is causing the problem, but often other events in their life have left them unable to pay their tax liability.
For some clients, what’s known as a “Status 53” can offer them breathing room when they need it the most. A Status 53, also known as “Currently Not Collectible”, is available to certain taxpayers that meet the IRS’ determination for hardship. According to the IRS website (www.irs.gov), “a hardship can be due to financial, medical, or unpredictable events such as natural disaster or unemployment.” In other words, if paying their tax liability will cause undue hardship on the taxpayer (and their family), they may qualify for being placed into Status 53.
Status 53 allows taxpayers to defer making payments on their tax liability due to a lack of adequate income. Being declared “currently not collectible” allows them to provide for themselves and their family.
There are important considerations to think about before pursuing Status 53. Once placed in CNC , the IRS continually monitors clients under this provision and they may be changed back to “collectible” status if the taxpayer’s income increases enough. Penalties and interest continue to accrue during the period the taxpayer remains under Status 53.
Recently, the tax team at JK Harris got a Status 53 in place for the Martin family of Mt. Sterling, Kentucky. This family had undergone several traumatic events and already faced economic hardship when they received notice that they owed $56,649 in back taxes, interest and penalties. Working closely with their Case Specialist, they qualified for “Currently Not Collectible” status.
“I really don’t know how to express how much JK Harris helped us,” Mrs. Martin said. “Thanks for everything, JK Harris.”
As far as we’re concerned, the $56,649 we saved the Martins is thanks enough.