IRS Currently Not Collectible Status

When you have a significant tax debt, the Internal Revenue Service may use aggressive collection actions to recover what you owe. But if you’re facing financial hardship, Currently Not Collectible Status (CNC) can help you pause intimidating letters and collection activity like garnishments and levies.

What is Currently Not Collectible (CNC)?

Currently Not Collectible is a status that the IRS assigns to taxpayers who cannot pay their taxes due to financial hardship.

CNC is a temporary status that generally stays in place until your financial situation changes or improves. It does not remove your tax debt, but you are not required to make payments while in CNC status – and the IRS will not engage in collection actions.

CNC status temporarily stops the following IRS collection actions:

  • Bank levies
  • Tax liens
  • Wage garnishments
  • Aggressive collection letters
Get a Free Consultation

Is IRS Not Collectible Status Right For Me?

Currently Not Collectible status is for people facing severe financial hardship. The IRS uses strict eligibility requirements to determine if you qualify.

Non-Collectible status may be your best option if you’re facing these situations:

  • Your monthly income barely covers essential living costs.
  • You have limited assets.
  • Attempting to pay your tax liability will cause significant financial distress.
  • You are impacted by bank levies, wage garnishments, or asset seizures.
  • You don’t have a realistic way of paying off your tax debt.

Benefits of the Currently Not Collectible Status

Being placed in CNC status by the IRS provides critical tax relief, especially when you’re struggling to make ends meet. This temporary status allows you to focus on what matters most—stabilizing your finances and well-being.

Here are some benefits that CNC provides:

  • A pause on IRS collection activities
  • Time to recover and improve your financial situation
  • Your assets are protected from IRS collection actions
  • Establish compliance with the IRS
  • If your CNC status extends past the Collection Statute Expiration Date (CSED), your tax debt may be written off

How Do I Qualify For Currently Not Collectible?

To secure Currently Not Collectible status, you must meet specific IRS criteria and demonstrate genuine financial hardship. Before your application can be considered, the IRS may require you to comply with current tax filings.

Once you are fully compliant, the IRS will evaluate several factors such as:

  • Monthly income from all sources
  • Equity in the assets you own
  • Monthly living expenses
  • Any special circumstances affecting you (major injuries, disabilities, accidents, etc.)

The IRS will consider these factors and determine the amount of money you can access from equity in assets, as well as your remaining monthly income after basic living expenses.

If your situation clearly meets the qualifications, the IRS will place you in a Currently Not Collectible status, immediately stop all collection activities, and not require you to make any payments towards your tax debt.

For any questions about your Currently Not Collectible eligibility, please contact a TaxRise specialist at 833-419-RISE (7473). Based on your tax history and current financial situation, we can provide a free consultation to determine if you may qualify for this resolution.

Important Considerations About IRS CNC

While using non-collectible status provides an immediate pause in IRS collections and monthly payments, there are limitations to consider. Above all, this is a temporary solution, and there are ongoing factors and obligations, including:

  • The IRS can review your CNC status annually.
  • Interest and penalties will continue to accrue on your tax liability.
  • Any future tax refunds will be applied to your outstanding tax debt.
  • You must remain compliant with filing tax returns and paying new tax liabilities.
  • Tax liens can still be filed in certain circumstances.

Can I be Denied Currently Not Collectible?

The IRS can deny taxpayers the Currently Not Collectible status for various reasons. This is mainly dependent on your ability to pay any outstanding tax debts. You will be denied CNC status if the IRS determines that you have sufficient income to cover both basic living expenses and your tax payments.

Other than a history of non-compliance, CNC denial can include having multiple income sources, high-value property or assets, making recent luxury purchases, major inconsistencies between your documented income and lifestyle, and more.

If applying for Currently Not Collectible is not viable, there is still hope. There are other payment plans and tax relief programs available to alleviate your debt. We recommend consulting with trusted tax professionals who can fully evaluate your situation and negotiate your case.

Get a Free Consultation

Why Work With TaxRise To Secure My Currently Not Collectible Status?

Applying and negotiating with the IRS for a CNC status can be difficult and complex in some cases. At TaxRise, we do not follow a one-size-fits-all approach. Our experienced team will meticulously conduct financial analysis, prepare robust strategies and necessary supporting documents, and leverage our IRS knowledge to maximize your chances.

With TaxRise, You Get

  • Free consultations
  • Tax professionals on your side
  • Currently Not Collectible help
  • IRS negotiation on your behalf
Qualify today for a Fresh Start.

Learn how easy it is to resolve your tax problems.

Get started now

Frequently Asked Questions

When you apply for Currently Not Collectible, the IRS will, in some cases, review your information with a Collection Information Statement – Form 433-F, Form 433-A, or Form 433-B. This compares your monthly income with their allowable living expense standards.

Once the IRS determines your tax liability is currently not collectible, it will remain in effect until your financial situation improves significantly. Your status and income may be reviewed annually to determine if you are still eligible. In some cases, you can remain non-collectible for several years or until the Collection Statute Expiration Date (CSED).

No, being Currently Not Collectible does not extend the Collection Statute Expiration Date. It will remain 10 years from the date of your tax assessment.

The Currently Not Collectible status does not remove your tax debt, but the 10-year statute of limitations will continue to elapse. Your remaining tax debt may be written off if you are still non-collectible when the collection statute expires.

Your credit score will not be affected if you apply for or receive a CNC status. However, keep in mind that any tax liens on your account before or during your CNC status may impact your creditworthiness for certain loans, like mortgages.

If you experience any significant changes in your financial situation, it must be reported to the IRS. The IRS will also monitor any increases in your income and review your eligibility to stay in a CNC Status. If they determine you can pay off your tax debt or afford monthly payments, your CNC status will be removed.

Yes, the IRS will notify you if it deems you no longer eligible for the Currently Not Collectible status. If your IRS CNC status is removed or expired, you can negotiate a different resolution depending on your financial situation.