Currently Not Collectible: When the Best Move Is to Pause the IRS

Sometimes the strongest thing you can do for a collection client is get the IRS to stop. Not settle. Not set up a payment. Stop. No levy, no monthly draft, no enforced collection at all, while the balance sits frozen on the books and the only clock still moving is the one running in your client’s favor.

That is Currently Not Collectible status, what the IRS internally calls status 53, and it is the most misunderstood resolution in the toolbox. Practitioners treat it like a consolation prize, the thing you settle for when an offer in compromise falls through. Used with intent, it is often the smartest available play, and on the right case it quietly delivers a better outcome than any payment plan you could negotiate.

This is the kind of judgment we work on inside Tax Resolution Academy®: not just how to fill out the form, but how to read the financials and pick the resolution that actually serves the client. Here is how CNC qualifies, the financial mechanics behind it, what happens to the balance and the collection statute while your client is in it, the lien question you have to address up front, and how to know when CNC beats an installment agreement or an offer.

What CNC actually is

Currently Not Collectible is not forgiveness. The debt does not go away. The IRS simply makes a determination that your client cannot pay anything right now without being unable to meet basic, necessary living expenses, and it suspends active collection.

The standard comes straight from the Internal Revenue Manual. An account goes into hardship CNC when collection of the liability would create a hardship by leaving the taxpayer unable to meet necessary living expenses. That is an economic hardship determination, the same hardship principle that lets you get a levy released under section 6343. When the numbers show there is no money left after allowable living expenses, enforced collection becomes the thing the IRS is supposed to avoid, not pursue.

Inside the IRS, the account gets coded with a transaction that reflects the closing, and hardship cases are closed using closing codes in the 24 through 32 range, chosen to match the level of the taxpayer’s total allowable living expenses. You do not need to memorize the codes. You do need to understand what they represent: the IRS has agreed, on the record, that your client has no current ability to … Continue reading

Pick a Niche or Stay Forgettable: How to Position Your Tax Resolution Practice

Every service you add to your pitch makes you easier to forget, not harder.

When someone asks what you do, what comes out of your mouth?

I am going to guess it sounds something like this. “I’m a CPA. I do tax returns, bookkeeping, some payroll, a little planning, and I help people who get into trouble with the IRS.” Five services in one breath. You said all of it because you were afraid that if you left one out, you might lose a client who needed that one thing.

Here’s the problem. You just described half the tax professionals in your county. The person you said it to nodded politely and forgot you in eleven seconds, because you gave them nothing to hang their memory on. When you are known for everything, you are remembered for nothing.

That stops today. In this post I am going to walk you through how to choose a profitable niche and position your practice so the right clients find you, pay your full fee without flinching, and refer you by name to people exactly like them. This is the same positioning work we drill inside Tax Resolution Academy®, and it is the highest-paying decision you will make all year that costs you exactly zero dollars to make.

The Generalist Trap (And Why You’re Stuck In It)

I know what you’re thinking. “But Dan, if I pick one thing, I’m turning away everyone who needs the other things. I can’t afford to narrow down. I need every dollar that walks in the door.”

I get it. I respect it. And I’m telling you it is the exact belief keeping your fees flat, your revenues low and your weeks at 60 hours a week.

Here’s what’s actually happening. The generalist competes on one axis: price. When a prospect cannot tell the difference between you and the three other firms they called, the only lever left is “who is cheaper.” So you get beaten down on fee, you take the work anyway, and you fill your calendar with low-margin returns from people who will leave you for a $50 coupon next February.

The specialist competes on a completely different axis: “this person fixes my exact problem.” A small business owner who just opened a Letter 1058 (the IRS final notice of intent to levy) does not want a generalist. They want the person who handles IRS collections all day and has … Continue reading

How to Turn One-Time Tax Resolution Clients Into Year-Round Recurring Revenue

You close the case, the client shakes your hand, and you walk them straight to the door with nothing in your other hand.

Think about the last resolution case you finished. You got the client into an installment agreement, or you closed the offer, or you knocked the penalties off and the account finally read zero. The client was thrilled. You did hard, skilled work that most tax professionals cannot do. And then what did you offer them for the next? Be honest. Most of the time the answer is nothing. You handed a client you already earned back to the wild, where the next tax pro picks them up for free.

Come on. You know better.

The resolution pros making real money do not do that. They keep the client on a leash they can both live with, and they get paid every month (or quarter or year) to do it. The centerpiece of that is account monitoring, and it is the most natural recurring service a resolution practice will ever sell. This is exactly the kind of practice-building we drill inside Tax Resolution Academy®. In this post I am going to show you how account monitoring works, why it belongs in your practice, how to price it, and how to stack tax return prep, bookkeeping, and payroll services on top of it so the relationship pays you all year instead of once.

Account Monitoring: The Recurring Service Built For Resolution

Here is what account monitoring actually is. After the case closes, you revoke your POA and add a Form 8821, Tax Information Authorization, on file for that client. That single form lets you pull the client’s IRS account transcripts on a schedule, month after month, without the client lifting a finger or signing anything new. You are not waiting for a problem to walk in your door. You are watching the account so you see the problem forming before the client does, and long before the IRS mails a letter about it.

Read that again. You get to see trouble coming. The client stays compliant, the resolution you fought for holds, and you get paid a monthly fee to be the one watching. That is a service, not a favor.

What are you actually watching for when you pull those transcripts? Real events that wreck a resolution client:

  • A new balance posting. A new assessment shows up on the account and you catch
… Continue reading