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Currently NOT COLLECTIBLE
What Is IRS Currently Not Collectible (CNC) Status?
Currently Not Collectible status means the IRS has determined that collecting your tax burden right now would cause financial hardship. While your account is in CNC status, the IRS temporarily pauses most collection actions, including wage garnishments and bank levies. A tax professional can help communicate this hardship to the IRS and ensure your account is coded correctly.
What CNC Status Really Means
Protection During Financial Hardship
The IRS may place an account in CNC status when your income is needed to cover basic living expenses. If there’s no reasonable ability to make payments, collections are temporarily delayed.
Temporary Relief, Not Forgiveness
CNC status is a hardship designation—not tax forgiveness. Your tax bill doesn’t reduce or disappear, but the IRS agrees to pause collection activity while you’re unable to pay. It is important to note that penalties and interest will continue to accrue on your total outstanding tax balance owed.
Subject to Future Review
Currently Not Collectible status is not a permanent solution. If your financial situation improves, the IRS can and will reassess your account and resume collection efforts.
How the IRS Determines Eligibility
Before approving CNC status, the IRS typically requires a Collection Information Statement (Form 433-A, 433-F, or 433-B, depending on your situation). This form details your income, expenses, assets, and liabilities, and often requires supporting documentation such as pay stubs, bank statements, and proof of monthly living expenses.
Completing these forms accurately is critical. A tax professional can help advocate for your financial reality in light of the IRS’s allowable expense standards. In most cases, you must also be current with all required tax filings before the IRS will consider placing your account into Currently Not Collectible status. A tax professional can help identify and resolve any missing or unfiled returns before requesting hardship relief.
Documents to Prepare for CNC Status
When applying for Currently Not Collectible status, the IRS may ask for supporting documents such as:
- Recent pay stubs or proof of income
- Bank statements
- Monthly expense reports (housing, utilities, transportation, food)
- Information on vehicles, property, or other assets
Having these records ready can make the process smoother. In some cases, if you don’t qualify for CNC, the IRS may still accept other forms of tax relief such as a Partial Payment Installment Agreement.
How Long Does the CNC Process Take?
The timeline for a Currently Not Collectible (CNC) request can vary depending on your tax situation and how quickly the IRS receives and reviews your financial information. In many cases, the process can take weeks to be approved.
Delays often occur when documentation is missing or follow-up questions arise. While it’s possible to apply for CNC status on your own, working with a tax professional can help keep the process moving by ensuring forms are completed accurately with follow up questions anticipated and responding promptly to IRS requests.
Struggling with IRS Collections?
Optima Tax Relief can help evaluate whether Currently Not Collectible status or another resolution option may apply to your case. Get Help with CNC StatusWhat Happens While You’re in CNC Status
Collections Are Paused, Not Eliminated
While most IRS collection activity is paused under Currently Not Collectible status, penalties and interest continue to accrue. The IRS may still file a Notice of Federal Tax Lien, and any future tax refunds can be applied to your outstanding balance. CNC status provides temporary relief, but it does not reduce or eliminate your tax debt.
Your Account Is Periodically Reviewed
CNC status is not permanent. The IRS periodically reviews your financial situation to determine whether you still qualify for hardship relief, including reassessing your income, expenses, and overall ability to pay. The IRS typically reviews your status every 1-2 years.
What Can Trigger Removal from CNC Status
The IRS uses internal indicators to flag accounts for review. If your income increases or your financial circumstances improve beyond allowable living expenses, the IRS may remove your account from CNC status and request updated financials. Otherwise, the IRS may resume collection activity.
Using CNC Status to Plan Your Next Steps
How To Request IRS CNC Status
Financial Hardship Review
To request CNC status, you must show the IRS that paying your tax liability would create financial hardship. This determination is based on whether your income is needed to cover basic living expenses.
Required IRS Forms
CNC requests typically involve submitting a Collection Information Statement (Form 433-A, 433-F, or 433-B) along with documentation detailing your income, expenses, assets, and liabilities.
Professional Guidance Available
While you can request CNC status on your own, many taxpayers work with a qualified tax professional. They can help ensure your information is well prepared and reduce the risk of delays or denials.
Frequently Asked Questions
FAQs About Currently Not Collectible Status
How long does Currently Not Collectible (CNC) status last?
CNC status lasts as long as you meet the IRS’s financial hardship criteria, but the IRS typically reviews accounts every 1–2 years. Status can end if the IRS finds your financial situation has improved. Staying current with tax filings is essential to maintain CNC protection. A new tax liability will cause the CNC status to end.
What is the IRS form for CNC status?
There’s no single CNC form. You request status by submitting a Collection Information Statement with financial documents. Individuals usually use Form 433-F or 433-A, while businesses use Form 433-B. These forms detail your income, expenses, assets, and liabilities to show that paying your tax debt creates financial hardship.
Can the IRS reject my CNC request?
Yes, the IRS can deny CNC status if you have the ability to pay your tax debt. Common reasons include excess income, assets that could cover the debt, incomplete documents, or unfiled tax returns. If denied, you can appeal, reapply, or consider alternative payment options like installment agreements.
Do I still need to file tax returns while in CNC status?
Yes, filing all required tax returns is mandatory to maintain CNC status. Failing to file or pay current taxes can end your CNC protection and resume collections. Staying compliant demonstrates good faith and helps keep your account in hardship status.
Can I get out of CNC status voluntarily?
Yes, you can exit CNC status anytime if your financial situation improves and you’re ready to pay. Voluntary removal can allow you to mitigate the accrual of penalties and interest with an installment agreement. Contact the IRS to set up a payment plan based on your current finances.
Optima Tax Relief, LLC is a tax resolution firm independent from the IRS. This content is made available for informational and educational purposes only. Nothing included in the content should be taken as a guarantee, warranty, prediction, or representation about your specific situation. This content is not intended to be a substitute for professional advice and services. We encourage you to consult with a tax professional to discuss your specific tax matters. Individual results may vary. We do not provide tax, financial, bankruptcy, accounting, or legal advice and nothing contained in this content is intended nor shall be construed as such.
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Have additional questions about filing for CNC status?
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Call 1-800-536-0734 for a free consultation.
Let Optima Tax Relief Help
Call 1-800-536-0734 for a free consultation.