- 1). Check that all of your tax returns have been filed. Prior to determining whether you need to pay in installments or if you qualify for CNC, the IRS requires your tax filings be up to date.
- 2). Identify and list all sources of income. Gather all paycheck stubs, statements of income, or any documentation of income you and your spouse have earned in the past month. Establish which portion of income is consistent and which portion was a "one time" source of income. The consistent portion of your income will establish your baseline income for the year.
- 3). Determine if you have access to any other resources that you can use to pay down the debt. Include lines of credit, credit cards, and any significant assets that you own, such as a home or life insurance policy. These are all assets which could be used to secure funds to pay the tax liability, either through the asset's sale or with the asset being used as collateral for debt.
- 4). Calculate your monthly expenses. Include payments for transportation, food, medical insurance, tax payments, court ordered payments, housing and utility costs.
- 5). Estimate whether you qualify for CNC status. Ultimately, the CNC status is granted by the IRS, and there are no clearly established guidelines to the extent that if you make a certain percentage more in income than your expenses demand you do not qualify for CNC. However, if you do not have assets or lines of credit to use to obtain money to pay down your debt and if your income barely meets your monthly financial needs, you have a good chance of being granted CNC status.
- Advertisement -
- Advertisement -