Currently Not Collectible Status
Can't afford to pay your tax debt right now? Currently Not Collectible (CNC) status can pause IRS collection activity and give you breathing room.
See If You Qualify
What is Currently Not Collectible Status?
Currently Not Collectible (CNC) status — also called hardship status — is an IRS designation that temporarily stops all collection activity when you can't afford to pay your tax debt without creating financial hardship.
When the IRS places you in CNC status, they acknowledge that paying your tax debt would prevent you from meeting basic living expenses like food, housing, and utilities.
Key benefit: The 10-year collection statute continues to run while you're in CNC status. This means your debt could expire without you paying anything.
What Happens When You're in CNC Status
Collections Stop
The IRS stops collection calls, letters, wage garnishments, and bank levies. They acknowledge you can't pay right now.
No Required Payments
You're not required to make any payments while in CNC status. The IRS pauses collection indefinitely until your financial situation improves.
Interest Continues
Your debt doesn't disappear. Interest and some penalties continue to accrue while you're in CNC status.
Periodic Review
The IRS will review your status periodically (usually every 1-2 years) to see if your financial situation has improved.
Who Qualifies for CNC Status?
The IRS uses allowable living expense standards to determine if you qualify for hardship status. You may qualify if your necessary living expenses exceed your income.
Allowable expenses include:
- Housing and utilities
- Food and clothing
- Transportation (car payment, insurance, fuel)
- Health care expenses
- Child care and support
- Court-ordered payments
Common CNC Situations
Living on Social Security or fixed income
Recently unemployed or underemployed
Significant medical expenses or disability
Supporting multiple dependents
High cost of living area
The Strategic Value of CNC Status
CNC status isn't just about stopping collections — it can be a powerful strategic tool. While you're in hardship status, the 10-year collection statute continues to run. This means your debt could expire without you paying the IRS a single dollar.
We'll analyze your situation to determine if CNC is the right strategy for you, or if another resolution like an Offer in Compromise or payment plan might be better.
Frequently Asked Questions
What does "Currently Not Collectible" actually mean at the IRS?
When the IRS places your account in Currently Not Collectible (CNC) status, they are formally acknowledging that collecting your tax debt would cause you financial hardship. Your account is flagged in their systems as CNC, and all active collection efforts — including phone calls, letters, levies, and garnishments — are halted. The debt still exists and interest continues to accrue, but the IRS agrees to step back and revisit your case at a later date when your financial situation may have improved.
How difficult is it to get the IRS to place your account in CNC status?
For many taxpayers, it's more attainable than they expect. The IRS has access to all of your reported income through wage and income statements, and in some cases, a collections agent can make a CNC determination over the phone based solely on income level. For most taxpayers, though, you'll need to submit a financial statement (Form 433-F or 433-A) documenting your income, expenses, and assets. The IRS compares your income against their allowable living expense standards — if your necessary expenses exceed your income, CNC is typically granted. Having a professional present your financial information correctly makes a significant difference in the outcome.
How much do I have to pay the IRS each month if I'm in CNC status?
Nothing. That's the key benefit. If the IRS agrees there is no reasonable collection potential and places your account in CNC status, you are not required to make any payments for as long as your account remains in hardship status. However, the IRS will continue to apply any future tax refunds to your outstanding balance. For this reason, it's important to adjust your withholding so you don't generate large refunds that the IRS will automatically seize.
Is CNC status permanent?
CNC is considered a temporary status, though "temporary" can mean years in practice. The IRS reviews CNC accounts periodically — typically when your income changes significantly (which they monitor through annual tax filings) or after a set review period, usually every one to two years. If your financial situation improves substantially, the IRS may remove CNC status and resume collection activity. However, if your circumstances remain the same, you can stay in CNC status until the 10-year collection statute expires and the debt is legally wiped away.
Is CNC always the best option, or could it hurt me in the long run?
CNC isn't always the optimal strategy. Because penalties and interest continue accruing while you're in hardship status, your total debt grows over time. The IRS is essentially betting that your financial situation will improve enough for them to collect more later. For some clients — particularly those on fixed income or with permanent disability — CNC is clearly the best path because the debt will likely expire before they can pay. But for younger taxpayers or those whose income may rebound, an Offer in Compromise or a partial payment installment agreement might be a better long-term strategy. We analyze your specific situation to recommend the right approach.
Can the IRS still take my tax refund while I'm in CNC status?
Yes. Even though the IRS stops active collection efforts like levies and garnishments, they will still offset any federal tax refunds against your outstanding balance. State refunds may also be intercepted through the Treasury Offset Program. This is why we advise clients in CNC status to adjust their tax withholding to minimize refunds — it's better to keep more in each paycheck than to generate a refund the IRS will take. We can help you determine the right withholding adjustments to make.
Can I get CNC status for state tax debt too?
Most state tax authorities have some form of hardship status similar to the IRS's CNC designation, though the names, requirements, and processes vary. Some states are more generous than the IRS in granting hardship status, while others are significantly more restrictive. We handle CNC requests with both federal and state tax authorities and can coordinate your cases to ensure you're protected from collection on all fronts.
Related Tax Relief Services
CNC may not be the only — or best — option for your situation. Consider these alternatives:
Offer in Compromise
If you qualify, settle your tax debt for less than you owe — permanently eliminating the balance rather than waiting for it to expire.
IRS Payment Plans
If you can afford some monthly payment, an installment agreement stops collection actions while actively reducing your balance over time.
Wage Garnishment Release
If the IRS is already garnishing your wages, we can get the garnishment released while pursuing CNC status or another resolution.
Get Relief from IRS Collections
Find out if Currently Not Collectible status is right for you. Your consultation is free and confidential.