UNCOLLECTABLE STATUS:
In some situations, it is possible for the IRS to stop collections and put your debt on hold. You need to be current with all tax payments and in compliance with all your tax return filings. They will classify you as temporarily unable to pay a back-tax liability. In this situation, the IRS may classify the debt as uncollectible. The IRS essentially puts you in the filing cabinet but will check in from time to time. The debt remains – as do the penalties and interest, which will continue to accrue – but the IRS agrees to reframe from collection activities for a set period of time.