Currently Not Collectible (CNC) status is a powerful IRS program that can temporarily pause collection actions against you when you cannot afford to pay your tax debt. If the IRS is garnishing your wages, levying your bank accounts, or threatening other collection actions, Currently Not Collectible status may provide immediate relief. At Nationwide Tax Relief Co, we help taxpayers across the country qualify for CNC status and other tax relief programs.
What Is Currently Not Collectible (CNC) Status?
Currently Not Collectible status, officially known as CNC or Hardship Status, is an IRS designation that temporarily stops all collection activities against a taxpayer. When the IRS places a taxpayer’s account in CNC status, it means the IRS has determined that collecting the debt would cause financial hardship. The IRS will not attempt to collect the debt while the account is in CNC status, but interest and penalties continue to accrue.
Who Qualifies for Currently Not Collectible Status?
The IRS will consider granting CNC status to taxpayers who demonstrate that their monthly income is equal to or less than their monthly allowable expenses. The IRS uses specific standards to evaluate allowable living expenses including housing, food, transportation, healthcare, and other necessities. You may qualify if:
Your essential monthly expenses exceed or equal your monthly gross income
You have no assets that could be liquidated to pay the tax debt
Paying the debt would leave you unable to cover basic living needs
You are unemployed, on disability, or have experienced a significant income reduction
What Happens When You Receive CNC Status?
When the IRS grants CNC status on your account, several important things happen:
Collection Stops: All active collection efforts including wage garnishments, bank levies, and property seizures are immediately paused.
IRS Monitoring Continues: The IRS will review your income annually using your filed tax returns. If your income increases significantly, the IRS may remove your CNC status.
Statute of Limitations Keeps Running: The 10-year IRS collection statute continues to count down during CNC status, which could ultimately result in the debt expiring.
Interest and Penalties Accrue: Although collections are paused, your balance will continue to grow due to interest and penalties.
How to Apply for Currently Not Collectible Status
To apply for CNC status, you must prove financial hardship to the IRS. Here is how the process works:
Step 1: Complete IRS Form 433-A or 433-F. These financial disclosure forms document your income, expenses, and assets. The IRS uses this information to determine if you qualify.
Step 2: Gather Financial Documentation. Collect bank statements, pay stubs, utility bills, rent or mortgage payments, and other documents that verify your income and expenses.
Step 3: Contact the IRS or Work with a Tax Professional. You can request CNC status by calling the IRS directly or through a licensed tax professional who can represent you and negotiate on your behalf.
Step 4: Stay Compliant. To maintain CNC status, you must continue filing all required tax returns and avoid accumulating new tax debt.
CNC Status vs. Offer in Compromise: Which Is Right for You?
Both Currently Not Collectible status and an Offer in Compromise (OIC) are designed for taxpayers who cannot pay their full tax debt. CNC is a temporary pause in collections while an OIC is a permanent settlement of the debt for less than the full amount owed. If your financial situation is expected to improve, CNC may only delay the inevitable. An Offer in Compromise could permanently resolve your debt. A tax professional can help you decide which option is best for your situation.
Get Help With Currently Not Collectible Status Today
If you are struggling with IRS debt and cannot afford to pay, you may qualify for Currently Not Collectible status. At Nationwide Tax Relief Co, our licensed tax professionals have helped thousands of clients stop IRS collections and regain financial stability. Contact us today for a free, confidential consultation to see if CNC status is the right solution for you.
