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IRS Hardship Status - CNC - Tax Debt Help

Updated: Aug 22


Coast to Coast - IRS Help

IRS Hardship - Tax Debt Help

There are times when you know that you owe the IRS, but you can’t pay due to your current financial situation.

If it is proven to the IRS that you qualify for an IRS Hardship (#IRSHardship), the agency can agree to end enforcement actions. The IRS will acknowledge that you can’t both pay your taxes and your basic living expenses, it may place your account in Currently Not Collectible (CNC) status.

While your account is in CNC status (#CurrentlynotCollectible), the IRS generally won't try to collect from you. For example: It won’t levy your assets and income. However, the IRS will continue to  assess interest and penalties to your account and may keep your refunds and apply them to your debt. You'll also continue to receive an annual bill from the IRS as required under the law.

Before you are placed into IRS Hardship status the Agency may ask you to file any past due tax returns. If you request CNC status, generally, the IRS may ask you to provide financial information, to review your income and expenses and decide whether you can sell any assets or get a loan.

The IRS may collect your tax liability if your financial situation has improved when they conduct an annual review of your income. Usually, Currently not Collectible status will run for 18 to 24 months before the IRS seeks for renewal. At that time, you need to provide your current financial information.

The IRS can attempt to collect your taxes up to ten years from the date they were assessed. The IRS may suspend the ten-year period in certain circumstances but the agency usually doesn't do this. This means the Statute of Limitations may run out on the collection of your tax liability.

If you owe more than $10,000, instead of leaving yourself in Currently not Collectible status, it may behoove you to settle your tax liability with an Offer in Compromise. After all, the agency has already admitted that you cannot pay your tax debt so why not settle and rid yourself of the tax liability.

While in CNC status, the IRS will not suspend interest and penalty charges, even if it stops trying to collect the balance due. You may want to consider other possible tax relief programs available to you.

If your IRS problem is causing you financial hardship, you've tried repeatedly and aren't receiving a response from the IRS, or you feel your taxpayer rights aren't being respected, consider the tax professionals at Flat Fee Tax Relief.

You may be better off with professional representation from an IRS Tax Attorney, Certified Public Accountant (CPA), or Enrolled Agent (EA).

This article is brought to you by the tax professionals at Flat Fee Tax Relief who has been providing valuable tax liability help from, coast to coast, at a very affordable fee for more than a decade.

Our teams are strategically located in Clearwater, Florida, and San Diego, California. This allows our tax pros to be available from 8 A.M. Eastern to 6 P.M. Pacific time.





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