IRS Collections Restarted After Hold Checklist
Understanding Currently Not Collectible Status
The Internal Revenue Service uses the currently not collectible status to temporarily pause collection activity when you cannot pay your tax debt without creating financial hardship. This status does not eliminate your federal tax debt or stop interest and penalties from accruing on the unpaid balance.
Periodic reviews of your financial situation help the IRS determine whether your circumstances have improved enough to resume collection efforts. This status differs from a payment plan or offer in compromise because it does not resolve the debt but simply delays enforcement actions.
Placing your account in this status means the agency stops sending collection notices and refrains from issuing levies or wage garnishments. During this period, the Collection Statute
Expiration Date continues to run, which means the ten-year collection period does not pause unless specific events occur, such as bankruptcy filing or Collection Due Process hearing requests.
Who Qualifies for This Status
Requesting the currently not collectible status is appropriate if paying your tax debt would prevent you from meeting basic living expenses. The IRS evaluates your monthly income against allowable expenses to determine whether collection would create economic hardship.
Before approving your request, the agency may ask you to complete a Collection Information
Statement using Form 433-F, Form 433-A, or Form 433-B, depending on your situation and the amount owed. Documentation requirements vary based on the balance due and individual circumstances, with you needing to provide proof of financial status, including recent pay stubs, bank statements, and records of monthly expenses.
National and local standards guide the IRS in determining allowable living expenses during this evaluation process. Remaining current on filing all required tax returns and paying current-year taxes is mandatory even while older debt stays under this designation.
When Collection Activity Resumes
The IRS does not issue reminder notices before resuming enforcement after reviewing your currently not collectible status. Actions can restart without warning if the agency determines you can now pay.
Once enforcement resumes, the IRS can take the following actions
- Issuing a Notice of Intent to Levy on wages, bank accounts, or other property
- Filing a Notice of Federal Tax Lien to establish priority against creditors
- Seizing assets or rights to property to satisfy the tax debt
- Offsetting future federal tax refunds until the balance is paid in full
Steps to Take Before Collection Restarts
Contact the IRS immediately if your financial situation remains unchanged and you cannot afford to pay. Have current financial documentation available during the call, including updated income records and expense statements, when you reach the general collection line at
800-829-1040 for individuals.
Request a payment plan if your finances have improved enough to make monthly payments, but you cannot pay the full amount owed. The IRS offers several Installment Agreements, including short-term payment plans up to 180 days and long-term agreements with reduced setup fees for direct debit payments.
You can apply online through the IRS website or by submitting Form 9465 with supporting financial information. Consider requesting an offer in compromise if you cannot pay the full debt within the Collection Statute Expiration Date, as this option allows you to settle the tax debt for less than the full amount owed based on your ability to pay.
Filing Requirements and Current Tax Obligations
All required tax returns must be filed before the IRS will approve most payment arrangements or renew the currently not collectible status. Unfiled tax returns allow the agency to prepare a
Substitute for Return that typically results in higher tax liability because deductions, credits, and favorable filing status benefits are not included.
Staying current on filing and payment obligations for subsequent tax years prevents additional enforcement. Estimated tax payments or adjusted wage withholding help you avoid falling behind on current obligations while resolving past-due amounts when you owe for multiple years.
The failure-to-file penalty is five percent per month up to a maximum of twenty-five percent of the unpaid tax. Current-year taxes and unfiled recent returns will be pursued by the IRS while also addressing older debt simultaneously.
Appeal Rights and Professional Assistance
You have thirty days from the date of a Final Notice of Intent to Levy to request a Collection Due
Process hearing by submitting Form 12153. Missing this deadline eliminates your right to appeal the determination to Tax Court, though an Equivalent Hearing can be requested within one year without Tax Court review rights.
Collection Due Process hearings allow you to propose alternatives such as installment agreements or currently not collectible status while preventing most enforcement actions during the hearing period. Seek assistance from a tax professional or the Taxpayer Advocate Service if enforcement resumes and you face financial hardship, as this independent organization within the Internal Revenue Service helps taxpayers whose problems are causing financial difficulties.
Their service is free and available by calling 877-777-4778 or visiting the local office nearest you. Tax attorneys can help negotiate alternatives and protect remaining assets when wages are being garnished or bank accounts are levied.
What Collection Resumption Means
When enforcement resumes after a currently not collectible status, the IRS systematically pursues unpaid tax debt through available tools. Bank levies freeze funds for twenty-one days before transferring the money to satisfy your debt, while wage garnishments continue until the debt is paid in full.
Acting before collection enforcement begins gives you greater control over the outcome and preserves more resolution options. Waiting until after levies or garnishments start forces you
into a reactive position with fewer alternatives and higher costs from accumulated interest and penalties on the unpaid balance.
Need Help With IRS Issues?
If you're facing IRS issues and need expert guidance beyond this checklist, we're here to help with licensed tax professionals.
- Wage garnishment and bank levy release
- Tax lien removal and credit protection
- Offer in Compromise and installment agreements
- Unfiled tax return preparation
- IRS notice response and representation
20+ years experience • Same-day reviews available
