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Currently not Collectible | CNC Tax Program IRS

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CNC Tax Program IRS

How to Get Currently not Collectible Status. Year in, year out, approximately 30 million taxpayers file a return and owe taxes. Most people will pay the taxes when they file their returns. On the other hand, historically, about 4 million to 5 million can’t pay. Due to the COVID crisis, our tax professionals expect those numbers to triple. Many taxpayers will enter into Installment Agreements. But what about the others who can’t afford to pay? Here's one answer: Currently not collectible (CNC) status defers payment

Being placed into CNC status allows people in financial hardship situations to defer paying their tax bill until their situation improves. Often, unemployed people will seek CNC status from the IRS, as well as, taxpayers who have very little money left after paying their everyday expenses.


Getting qualified for CNC status means documenting your financial situation. Like everything else with the IRS, should you need the CNC tax program, you must prove to the IRS that you can’t afford to pay your tax liability. This will include but is not limited to bank accounts, stock portfolios, and real estate equity. Liquidation of other assets can also be a consideration. The IRS will keep any tax refunds (both state and federal) and apply them to your tax debt. Also, the the IRS will usually file a federal tax lien should the tax liability be more than $10,000.


CNC status may not be forever but it could "go away" if the Statute of Limitations runs out. After you get CNC status, the IRS will review your financial situation every 12 to 18 months to see if you situation has changed. If your financial situation improves significantly, the IRS may remove you from CNC status and ask for new terms. The IRS computer will analyze the income on your tax return or on information statements like Form W-2, 1099, etc., if you haven’t filed. If your income is more than the affordable expenses allowed, you’ll likely need to start making payments to the IRS unless you have added more necessary living expenses. The IRS will send a notice to you if it wants you to provide an update on current financial information about your CNC status. If you continue to have little money left over to pay, you will continue to be in CNC status. If your situation stays the same, the IRS will likely “write off” your taxes, penalties, and interest owed after 10 years. This rule is called the collection statute of limitations. At the end of 10 years, the IRS can no longer collect unless you have extended the collection statute by some action (filed an Offer in Compromise, left the country, and several other reasons). What Do You Need To Do Next? Well, you could call an experienced tax relief company, like ours, for a consultation. If the IRS has deemed you "Currently not Collectible" (CNC) and you owe $10,000 or more, a better way to go is to submit an Offer in Compromise (OIC). An OIC will rid yourself of the tax liability entirely.


This article is brought to you by the tax professionals at Flat Fee Tax Relief. We have been providing valuable IRS debt help at a very affordable fee for more than a decade,


Our teams are strategically located in Clearwater, Florida, and San Diego, California. Being "ready to go" from 8 A.M. Eastern to 6 P.M. Pacific comes in mighty handy when having a tax levy released in one day is imperative.



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