Currently Not Collectible (CNC) status is an IRS designation under IRC § 6343 that temporarily halts all collection activity when a taxpayer demonstrates that paying their tax debt would cause economic hardship. While in CNC status, the IRS cannot levy your bank accounts, garnish your wages, or seize your property. The 10-year Collection Statute Expiration Date (CSED) under IRC § 6502 continues to run, meaning CNC status can serve as a strategic path to eventual debt expiration for qualifying taxpayers.
What Is Currently Not Collectible Status?
CNC status is not a formal settlement or forgiveness program. It is the IRS's acknowledgment that collecting from you right now would leave you unable to meet basic living expenses. The IRS places millions of accounts in CNC status each year when taxpayers demonstrate genuine financial hardship. Once approved, all active collection stops, including levy actions, wage garnishments, and property seizures. However, interest and penalties continue to accrue on the outstanding balance.
The critical benefit of CNC status is that the 10-year CSED keeps running. Under IRC § 6502, the IRS generally has 10 years from the date of assessment to collect a tax debt. Unlike an Offer in Compromise (which can toll the statute) or a pending installment agreement (which pauses the clock during processing), CNC status does not extend the CSED. For taxpayers with older debts, CNC status can run out the clock on IRS collection authority.
How Do You Qualify for Currently Not Collectible Status?
The IRS evaluates your eligibility for CNC status by comparing your monthly income to your allowable living expenses using its Collection Financial Standards. These standards are published annually and include national standards for food, clothing, and personal care, plus local standards for housing, transportation, and healthcare that vary by county and family size. If your allowable expenses meet or exceed your income, you qualify for CNC status.
The IRS uses National Standards and Local Standards to determine allowable expenses. National Standards cover food, clothing, housekeeping supplies, personal care, and miscellaneous expenses. Local Standards cover housing (rent or mortgage, property tax, insurance, utilities) and transportation (ownership costs and operating costs). The IRS also allows actual out-of-pocket healthcare expenses when supported by documentation. Tax Forgiveness Pro documents your expenses thoroughly to maximize your allowable living costs.
How to Request CNC Status from the IRS
There is no specific form to apply for CNC status. Instead, the process involves contacting the IRS, providing financial documentation, and demonstrating hardship.
- 1Prepare Form 433-A or 433-FIndividual taxpayers complete Form 433-A (Collection Information Statement for Wage Earners and Self-Employed Individuals). Business owners with business tax debt complete Form 433-B. Form 433-F is a simplified version sometimes accepted for smaller balances.
- 2Gather supporting documentationBank statements (3 months), pay stubs, proof of housing costs, medical expenses, vehicle payments, and documentation of any other necessary expenses. The IRS verifies every figure.
- 3Contact the IRS or have your representative callYour representative calls the Automated Collection System (ACS) line or contacts your assigned revenue officer directly. Tax Forgiveness Pro, backed by a licensed law firm, has Power of Attorney to speak with the IRS on your behalf.
- 4IRS reviews and decidesThe IRS revenue officer or ACS representative evaluates your financial information against Collection Financial Standards. If expenses equal or exceed income, CNC status is granted. The process can often be completed in a single interaction.
What Happens While You Are in CNC Status?
Once the IRS places your account in CNC status, all active collection stops. No levies, no wage garnishments, no property seizures. However, several important things continue. Interest and the failure-to-pay penalty (0.5% per month under IRC § 6651) continue accruing on the outstanding balance. The IRS retains the right to file a Notice of Federal Tax Lien to protect its interest in your property, even while your account is in CNC status.
CNC accounts are reviewed annually by the IRS. The review is typically automated and based on your most recently filed tax return. If your income increases significantly, the IRS may remove your account from CNC status and resume collection activity. Tax Forgiveness Pro prepares clients for these annual reviews and assists with any necessary reclassification.
CNC Status vs Other IRS Relief Options
CNC status is one of several tools available to resolve tax debt. The right option depends on your financial situation and goals.
| Option | Best For | Debt Impact | CSED Impact |
|---|---|---|---|
| Currently Not Collectible | Cannot pay anything | Debt remains, interest accrues | Keeps running (key benefit) |
| Installment Agreement | Can pay over time | Full balance paid | Keeps running |
| Offer in Compromise | Can pay a lump sum less than owed | Significant reduction | Tolled during review |
Related Resources
Currently Not Collectible status pauses IRS collection but does not eliminate the debt. To explore programs that can reduce the balance permanently, read our guide on tax forgiveness while in CNC status. The IRS Fresh Start Initiative expanded eligibility for CNC and related hardship relief, as detailed in our Fresh Start hardship options overview. If your financial situation improves, an Offer in Compromise may become viable. Use our OIC calculator for financial hardship to evaluate your options. Taxpayers who received a CP504 notice and CNC eligibility may still qualify for hardship protection if they can demonstrate an inability to pay. If a prior installment agreement defaulted, the CP523 defaulted installment agreement notice may have accelerated collection activity.