IRS non-collectible status? Good news, not really.
Many of the people whom I have spoken to in regards to achieving a non-collectible status through the IRS collection, celebrate, seemingly enjoying a victory. Perhaps it’s a victory of sorts where at least you won’t be hassled with collection or liquidation procedures for some time. However, what does this truly mean?
It signifies that although the issue may be dormant and may appear as though you have a lifetime to deal with it, in reality the problem has not disappeared.
A cease to threatening letters, phone calls, and collection efforts may make you feel as though you have triumphed. But, has the issue really gone away?
A resounding NO!
Your issue has been removed from the active files and simply categorized as non-collectable on the system. However, unless you do something to “awaken the sleeping giant,” your issue will remain on the system and no action will be taken towards it.
Publicly recorded events such as attempts of getting loans, selling a home, or buying or registering a car can potentially awaken this giant. As a result, it will appear in its full glory and power allowing the resumption of the collection process.
Achieving a non-collectable status is fine or acceptable if you plan living under a rock and on the street for the rest of your life. But, if you feel that you need to do something productive for yourself and have the intention on doing so, deal with the issue once and for all. Bring it to a conclusion. Non-collectable status can easily become a long term death wish as opposed to salvation.
Following non-collectable status, it has already been determined that you lack assets and are incapable of paying. For this reason, an offer to compromise is a much wiser approach and an opportunity for wiping out the debt all together, forever.
So, have a celebration for one evening. However, be quick to getting back to work the following day. File your application for an Offer in Compromise because this is a plan that works.