Currently Not Collectible (CNC)

Currently Not Collectible status is granted when the IRS determines that you cannot afford to pay your tax debt without causing financial hardship. While in CNC status, the IRS suspends collection activity.

Timeline

Can be approved during a single phone call if you have documentation ready

Cost

No cost to request CNC status

Success Rate

High approval rate for those with documented financial hardship

Key Takeaways

Stops all IRS collection activity
No payments required during hardship
Debt may expire after 10-year statute
Can be approved in a single phone call

Best For

Taxpayers experiencing severe financial hardship
Those with very low or no income
People who cannot afford basic living expenses
Those who need temporary relief while improving finances

Requirements

1
All required tax returns must be filed
2
Must demonstrate that paying would cause hardship
3
Income must be at or below IRS allowable expense standards
4
Must provide financial documentation

The Process

Gather Documents

Collect proof of income, expenses, and financial hardship.

Contact IRS

Call the number on your notice or the general collection line.

Financial Review

Provide information about your income and expenses to the agent.

Determination

IRS decides if you qualify for CNC status.

Periodic Review

IRS may review your finances annually to check if you can resume payments.

Advantages

Stops all IRS collection activity
No payment required while in CNC status
Provides time to improve financial situation
Debt may expire if collection statute runs out
No formal application process - just a phone call

Disadvantages

Interest and penalties continue to accrue
Tax liens remain in place
IRS reviews your status periodically
Must resume payments if finances improve
Not a permanent solution

Frequently Asked Questions

How long does CNC status last?

CNC status lasts until your financial situation improves or the collection statute expires (usually 10 years from assessment). The IRS reviews CNC accounts periodically.

Will my tax debt go away?

The debt remains, and interest/penalties continue to accrue. However, if you remain in CNC until the collection statute expires, the debt is legally uncollectible.

Can I still get tax refunds in CNC status?

No. The IRS will typically apply any refunds to your outstanding balance, even while in CNC status.

What triggers an IRS review of my CNC status?

Significant income increases, large refunds, or inheritance may trigger a review. The IRS also does routine reviews of CNC accounts.