If you don’t qualify for an installment agreement, or any other options available, you might qualify for a Currently Not Collectible status. If after completing the Form 433-A or 433-B the IRS might agree that you have no assets to liquidate to pay the balance or any available cash flow on a monthly basis to make payments.
They can then put you into this status. Penalties and interest will continue to be added to your balances. The collection activity stops and the ten year statute of limitations on collections continues to run, meaning that while they leave you alone, the time they have to collect decreases.
This is not a solution but only a band aid. It stops the collection process but doesn’t make it go away. It gives you time to pursue other options and time to improve your financial condition so you can come up with a permanent solution. They will usually ask for updated financial information on an annual basis to see if your ability to pay has changed and they should take you out of this status.
