Currently Non Collectible IRS Financial Hardship
You may qualify for “Currently Non Collectible” or “Hardship” status.
Currently Non Collectible Status is a commonly used tax solution in dealing with IRS tax debt. If your income and expenses are such that you are left with little to no money at the end of every month then you are a candidate for this status also know as IRS hardship.
CNC, or currently non collectible, means that the IRS will temporarily stop collection action on your such as wage garnishment, bank levy, and asset seizure. If you are able to attain CNC there are several things to be aware of:
Currently Not Collectible Status Important Facts
- Tax Penalties and Interest Continue to accrue on your tax debt.
- A federal tax lien will be filed on all tax years with a balance.
- The IRS will stop all collection activity.
- The statute of limitations continues to run. The statute of limitations is 10 years from the date of each tax assessment. Some people remain in currently non collectible status until their entire tax debt expires and is no longer a liability.
- The IRS will continue to monitor your financial situation to determine if you are able to make a payment in the future. For example, if your income goes from $35,000 to $70,000 this would likely prompt the IRS to check in with you to determine if you can make payment.
How do I attain Currently Non Collectible status with the IRS?
Dealing with the IRS can be a delicate matter. The IRS representatives that you speak with on the phone will range from very competent to not competent and it can be very frustrating to deal with, especially if you are not sure of what your rights are as a taxpayer. To achieve CNC, you must submit your financial information to the IRS, this being you income, expenses, assets, and liability.
The IRS generally allows only “necessary living expenses” but will allow for other expenses under certain circumstances. You can fill out form 433-F or 433-A which are collection information statements. If you would like to learn more about this IRS hardship status please call our tax attorney for a free consultation.