Currently Not Collectible Status

Proposal of Currently Not Collectible (CNC) status is a tax settlement method used to prevent the IRS from employing any forceful collection actions against you. In order to qualify for CNC status, you must provide complete financial disclosure to the IRS, which may include information about your assets and your monthly income and expenses. If the financial disclosure substantiates that your allowable monthly expenses exceed your monthly gross income, then the IRS will conclude that you are suffering an economic hardship.

Being currently not collectible does not mean that the debt goes away. It means that the IRS has determined you cannot afford to pay the debt at this time. Assuming that the you stay in compliance and that your income remains at the same level as when the CNC proposal was initially approved, you can remain in CNC status until the expiration of the collection statute.

The greatest benefit of being placed in CNC status is the temporary suspension of certain IRS collection actions, such as issuing a levy (although a Notice of Federal Tax Lien may still be filed against you), until your financial condition improves. What's more, the collection clock continues to run even while collection actions are suspended. This settlement option is ideal for taxpayers experiencing financial hardships, and is especially beneficial for taxpayers in cases where the collection statute is nearing expiration.