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CNC Tax Relief Status | IRS Currently Non Collectible

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What Is CNC Status With The IRS?

IRS Currently Not CollectibleCurrently (CNC) is a status assigned to taxpayers whom the government has deemed unable to pay their outstanding tax liabilities. CNC status does "forgive" or settle the tax debt, it simply suspends the IRS from actively enforcing collection.


How do I get a CNC status from the IRS? In order for the IRS to place you in CNC status, you (or, better yet, your tax professional) must contact the IRS. You can write or call the IRS, but it's usually faster to interact by phone, because the IRS can tell you exactly what you'll need to provide to prove your hardship. There will be forms (example: 433-F) to complete and documents such as bank statements to be provided. What does it mean when the IRS puts you in uncollectible status?


Having a tax liability placed in uncollectible status (CNC) allows the taxpayer to remain current in tax compliance without worrying about enforcement action and allows a taxpayer to recover from a financial setback. The IRS may designate an account as being in uncollectible status for the short or long term. Usually it will continue for 18 to 24 months before the IRS request an update on your current financial status. There will be a tax lien filed to protect the governments financial position. What does IRS consider to be a hardship? The IRS may agree that you have a financial hardship (economic hardship) if it can be proven that you cannot pay or can barely pay your basic living expenses. The IRS has national standards for food, clothing and miscellaneous; housing and utilities; transportation (car payments, health insurance, child support, alimony, and out-of-pocket health care expenses.

Will my IRS debt ever go away? Great Question! In general, the Internal Revenue Service (IRS) has 10 years, from the date of assessment, to collect an unpaid tax debt. After that, the tax liability is wiped clean from its books and the IRS writes it off. The tax debt "just goes away." This is called the 10 Year Statute of Limitations. The IRS may become very very aggressive in the pursuit of the collection when it gets close to the Statute of Limitations. The agency could lift CNC status and go full out to collect.


What is the difference between CNC and an Offer in Compromise?


Although being placed in CNC status stops IRS enforcement, it doesn't make the tax debt "go away." The IRS can pull CNC status out from under you at any time.


An Offer in Compromise (OIC) is a complete settlement of your tax debt. Once the Offer in Compromise is paid, the tax debt is over. Our tax pros counsel our clients that an Offer in Compromise usually takes 10 to 12 months to complete. Sometimes, it will be shorter, but we don't want to "over promise."


CNC status and an Offer in Compromise share many of the same edibility and qualification requirements. One big difference is that you must owe more than $10,000 to be eligible for an Offer in Compromise. CNC does not have that restriction. The tax professionals at Flat Fee Tax Relief will often times have a client placed into CNC status so that we can get the IRS off their back while putting together the OIC settlement.


This article is brought to by the tax professionals at Flat Fee Tax Relief. We are a tax resolution firm providing tax relief options from coast to coast. Our teams are strategically located in Clearwater, Florida, and San Diego, California. This allows us to contact the IRS from 8 A.M. Eastern to 6 P.M. Pacific. That comes in handy when a levy must be stopped in one day.



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