Currently Not Collectible
Can't afford to pay the IRS? Learn how Currently Not Collectible status can pause all IRS collection activity. Free consultation available.
Currently Not Collectible Status Explained.
Currently Not Collectible (CNC) is a formal IRS designation that temporarily halts all collection activity on your tax account when the IRS determines that collecting would create a financial hardship. In CNC status, the IRS stops collection notices, pauses levy and garnishment actions, and suspends active collection. It does not erase the debt. Interest and penalties continue to accrue during this period. The IRS reviews CNC cases periodically and will resume collection activity if your financial situation improves enough to support payments.
What Is Currently Not Collectible?
Currently Not Collectible (CNC) is a formal IRS designation that temporarily halts all collection activity on your tax account when the IRS determines that collecting would create a financial hardship. In CNC status, the IRS stops collection notices, pauses levy and garnishment actions, and suspends active collection. It does not erase the debt. Interest and penalties continue to accrue during this period. The IRS reviews CNC cases periodically and will resume collection activity if your financial situation improves enough to support payments.
Who Qualifies for CNC Status?
The IRS determines CNC eligibility by comparing your monthly income to your monthly allowable living expenses using IRS national and local standards. If your income after allowable expenses leaves no amount available to pay the IRS, you may qualify. People who are unemployed, have very low fixed income, or are facing serious financial hardship are the most common candidates. The IRS requires documentation of your financial situation to approve the status.
Expert Insight From Rockwater Tax
Currently Not Collectible status is an underused option that many taxpayers in genuine hardship never hear about. People in difficult financial situations often assume the IRS will pursue them regardless of their circumstances. That assumption is not accurate. The IRS has formal procedures for recognizing when collection is not feasible, and CNC status is one of the most important.
The limitation people need to understand is that CNC is not a permanent solution. The debt remains on your account, interest and penalties continue to accumulate, and the IRS will revisit your case. For some people, CNC status is a bridge to a longer term resolution like an Offer in Compromise. For others, the IRS collection statute expires while they are in CNC status, which effectively eliminates the debt without any payment at all.
How CNC fits into a broader resolution strategy depends entirely on your specific situation. It is rarely the endpoint on its own, but as a tool for creating time and relieving immediate pressure, it is one of the most valuable options available to someone in genuine hardship.
Getting CNC Status
- We pull your IRS transcript to understand the full debt balance and current collection status
- Your Enrolled Agent documents your income and expenses against IRS allowable standards
- We submit the CNC request with supporting financial documentation
- Once approved, all active IRS collection stops.
- We monitor your account and advise on next steps as your situation evolves
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FAQ
Q: Does CNC status stop wage garnishment?
A: Yes. If your wages are being garnished, CNC status will stop the levy once approved.
Q: How long does CNC status last?
A: It continues until the IRS determines your financial situation has improved enough to support payments, or until the IRS collection statute expires.
Q: Will the IRS still contact me during CNC status?
A: The IRS sends an annual statement showing your balance. Active collection notices and collection actions stop.
Q: Does interest keep accruing in CNC status?
A: Yes. Interest and penalties continue to accumulate on the balance even while collection is paused.
