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IRS Help - Tax Debt Help
IRS Hardship - Currently not Collectible

Our Tax Pros Can Get The IRS Off Your Back

Filing your taxes, even when you are not able to pay them, is a must. It isn't against the law to owe the IRS tax debt, it is against the law to have unfiled tax returns. Should you agree with the Internal Revenue Service (IRS) that you owe it money, but you cannot pay, the IRS may place your account in “CNC,” or Currently Not Collectible, status. For those who are unable to meet their tax burden, CNC can be a financial lifesaver.


A taxpayer may want to seek Currently not Collectible status if their IRS debt is less than $10,000, which is the minimum to file an Offer in Compromise.

You may have hard assets (real property) but lack liquid assets (income) to pay your tax debt. This could be a reason to seek Currently not Collectible status. Being Currently not Collectible can provide "breathing room" while an Offer in Compromise is being prepared.

Understanding Currently Not Collectible Status

Essentially being in Currently not Collectible (CNC) will provide you with protection from the IRS enforcement and other collection actions against your assets (tax lien, tax levy, seizures, wage garnishment, etc.). Being placed into CNC status does not mean that your IRS debt is settled. To settle your tax debt, you need to submit an Offer in Compromise. CNC does not mean that you do not have to ever pay the money you owe the IRS, or that the IRS will not assess penalties (like late fees) against you during the time you remain in CNC.

Section of IRS Code explains the different situations in which an account may be moved to CNC status. For example, CNC status may be granted when:

  • Collection of taxes would create “a hardship for taxpayers” that leaves them unable to meet basic cost of living expenses;

  • When an individual dies and there is no collection potential from their estate;

  • When a taxpayer (or their assets) cannot be located; or

  • When a taxpayer cannot be contacted, even though location is known.

You may have heard of being "Currently not Collectible" as IRS uncollectible, IRS hardship, Currently non-collectible, or CNC. It's all the same and when you are in Currently not Collectible status, the IRS will leave you alone for approximately 18 to 24 months. During this period of time, the Statute of Limitations will continue to run out. CNC can be renewed and revoked. Every month on Currently Not Collectible status is one less month that the IRS can collect the tax debt. Yes, there will be a federal tax lien filed but credit reporting services have stopped posting tax liens. The tax debt may just go away by running out the collection clock.


How to Obtain CNC Status


As stated above, CNC status can be an essential part of financial health for those who have a tax liability but are unable to pay it. An experienced tax attorney can help to guide you through the steps of applying for CNC status, which include proving that you do not have any assets that would provide you with the ability to pay your tax burden.


To prove this, you must fill out and file several forms, including Form 433-A. This is a highly comprehensive form that should be filled out with a knowledgeable tax attorney. You will also need to include a copy of your tax return, proof of living expenses (including healthcare and transportation), and more.

The status of Currently Not Collectible (IRS Hardship) means precisely what you think. When it has been proven to the IRS that you are unable to pay on your tax liability or the assessed penalties and interest under the following circumstances.

  • Personal income covers only your essential living costs with no leftover money that the IRS can take

  • Lack of valuable assets subject to levying

  • Note that the IRS is not allowed to seize an asset that has less than 20 percent equity in the item or if the expense involved in seizing and selling is higher than the value of the equity

Although the idea of having nothing worth taking is not the ideal position to be in, it can help with dealing with the IRS. If your tax liability is considered uncollectible, collection activities by the IRS will be halted. While the IRS will be unable to collect against you, interest and penalties will continue to accrue on your tax debt.

Our Tax Attorneys are IRS problem-solvers and serve clients nationwide. When you call us for your free case consultation, we will do everything we can to make sure that your IRS problem and the options to resolve it are fully explained to you. Our mission will be to work hard to provide you with the best tax debt help possible.


To learn more about the tax relief program known as Currently not Collectible (CNC) status, contact Flat Fee Tax Relief today.


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FAQ Regarding Currently not Collectible Status

What Can I Do To Help Myself?

Do not ignore the IRS Notices sent to you. Should you decide to seek Currently not Collectible you should: 1. File your missing tax returns. Even if you owe money, file the returns. 2. It is possible the IRS will place you in Currently not Collectible status even if you have unfiled tax returns and are in a hardship situation. 3. Continue to file your tax returns even if you can't pay.

How Will Being IRS Uncollectible Affect Me?

If the IRS Places you in CNC status: 1. The IRS may keep any tax refunds and apply them to your tax liability. 2. You can may voluntary payments. (Why would you?) 3. The IRS maill not be enforcing collection with a levy. 4. The IRS more than likely will file a Federal tax lien. 5. The IRS may contact you to update your financial information. 6. The IRS could contact the State Department and that could affect your passport.

How Can I Obtain IRS Representation?

Absolutely and the "cerry on top" is that it is very affordable. An experienced tax professional like the Tax Attorneys at Flat Fee Tax Relief can advise you and guide you during the tax resolution process. Often times, our Tax Attorneys have a client placed into Currently not Collection so that they will be protected from IRS enforcement while we proceed with their Offer in Compromise. Our teams also use the CNC device to stop an IRS levy.

Is Being Currently Non-collectible Forever?

It is possible to play a little "cat and mouse" with the IRS. If the 10 year Statute of Limitations for the collection of your tax debt expires while you are in Currently not Collectible status, your tax debt will forever be uncollectible as the IRS will lose the ability to collect. The tax pros do not encourage novice taxpayers to try this on their own as mistakes in procedures wcould result in levies and seizure of assets.