Do you deserve a break from the unrelenting pressure of the IRS? You just might be entitled to one! “Currently Not Collectible” (CNC) is a status assigned to taxpayers whom the government has deemed unable to pay their outstanding tax liabilities. When an account is designated Currently Not Collectible, it temporarily pauses the IRS collection process—meaning no harassing letters, intimidating phone calls, or threatening levies. If you received an intent to levy notice, are having wages garnished or need general back tax relief, read on to learn more about this IRS non-collectible status and whether if you might qualify.
What Does Currently Not Collectible Mean?
You may have this term in television and radio ads for various tax companies talking about “Currently Not Collectible” or a “CNC” with buzzwords like, “available for a limited time only.” That is untrue. There is no “limited time available” for someone to reach Currently Not Collectible status.
“Currently Non Collectible” is a status a delinquent taxpayer can have with the IRS after the IRS temporarily pauses any active collections against the taxpayer.
“Currently Non Collectible” will stop levies, threatening letters and collection enforcement until your current financial situation improves. The IRS will do this if the taxpayer has demonstrated that collections have put them in economic hardship and cannot afford to pay their back taxes.
In most cases, the IRS won’t grant this status to a taxpayer until they are compliant.
Who is Eligible for Non-Collectible Status?
The definition and qualification for IRS “Currently Not Collectible” is found in Part 5, Chapter 16, Section 1 of the Internal Revenue Manual. It states that for a taxpayer to qualify or IRS CNC, they must demonstrate a financial hardship which, after paying for the cost of living expenses, leaves little to no room to pay off an outstanding tax debt. The taxpayer must demonstrate a severe economic disadvantage, and not just a mild inconvenience.
At Wasvary Tax Services we have multiple years of experience with helping our clients with IRS Tax payment plan situations. Our expertise can help guide you in what can often seem like a totally overwhelming, perhaps even impossible, process.