What Is IRS Currently Not Collectible (CNC) Status, and Do You Qualify?

Currently Not Collectible (CNC) status, which many people call IRS uncollectible status, is a temporary hold the IRS can place on your account when paying anything toward your tax debt would keep you from covering basic living expenses. The IRS says it has temporarily suspended most collection activities while the account is in this status. It does not erase what you owe, and it does not stop interest and penalties.

Already have a levy, a garnishment or a final notice? Call (407) 531-8705 and tell me it is urgent. I will prioritize it.

When a levy or garnishment is active, the first steps are a signed Form 2848 Power of Attorney and a call from me to the IRS asking for a hold on collection. In many of my cases, once the Form 2848 is signed and I have called the IRS, collection has been put on hold within 24 to 48 hours. The IRS makes that decision, so I cannot promise it in any individual case.

The short answer:

• CNC means the IRS has determined you can’t afford to pay the debt at this time, and it has temporarily suspended most collection activities.
• You still owe the full amount. The IRS says the debt is not forgiven or cancelled, and penalties and interest continue to accrue.
• The test is hardship: under the IRS manual, a hardship exists if a taxpayer is unable to pay reasonable basic living expenses. There is no fixed income cutoff.
• The IRS may still file a Notice of Federal Tax Lien and may apply your federal tax refund to the debt.
• There is no fixed time period. The IRS may review your finances periodically and may resume collection if your ability to pay improves.

I am Peter Kici, an Enrolled Agent and a Marine Corps veteran, and I help taxpayers in Orlando and across Central Florida deal with IRS collections. When someone calls me about CNC, they usually think a hardship letter will make the IRS go away. It won’t. This page explains what the IRS actually looks at and what to expect.

Which of these is happening to you right now?

• I can’t pay the IRS anything right now.
• The IRS is already taking my paycheck or my bank account.
• I have tax returns that were never filed.
• I am already in CNC and my situation has changed.
• I want to know if a payment plan or a settlement fits better.

What if you can’t pay the IRS anything right now?

If this is you: after rent, food, utilities, transportation and medical costs, there is nothing left to send the IRS. Do this now: call me before you say anything to the IRS. What goes on that first call and on a financial statement can be used to decide you can pay.

Who qualifies for CNC status?

There is no fixed income cutoff. The Taxpayer Advocate Service says the IRS looks at your current financial situation and whether you can pay after meeting your basic living expenses. Under IRM 5.16.1.2.9, a hardship exists if a taxpayer is unable to pay reasonable basic living expenses, and an account should not be reported CNC if the taxpayer has income or equity in assets and enforced collection would not cause hardship.

That trips people up. Someone with a modest paycheck but equity in assets, such as a home, may not qualify even though cash is tight.

What will the IRS look at before it agrees you can’t pay?

The IRS does not take your word for it. It says that before approving a delay it may require a Collection Information Statement, Form 433-F, 433-A or 433-B, and documents verifying your income, monthly living expenses, bank accounts, and property and other assets. It measures your expenses against its own Collection Financial Standards, and Form 433-F says substantiation may be required for expenses over those standards. Equity in a home, a vehicle or an account can sink a CNC request even when cash is tight.

What can go wrong?

• A denial you cannot appeal. The Taxpayer Advocate Service says you do not have the right to appeal the denial of a CNC request.
• A statement that shows “ability to pay.” Numbers entered without the standards in mind, or assets left unexplained, can turn a hardship case into a payment demand.
• A good-faith problem. The hardship rules address falsified financial information, inflated expenses and failure to disclose assets. A careless statement can look like one of those.
• Missing the better option. The IRS manual says other collection options, such as an Offer in Compromise, should be discussed before an account is reported CNC.

That is why we build the financial statement, gather the proof and deal with the IRS for you. You do not make that call.

Can’t pay anything right now? Do not guess at the numbers on an IRS financial statement. I will go through your income and expenses with you and tell you plainly whether CNC is realistic.

Call (407) 531-8705 · Book your free confidential consultation · Request a free confidential consultation online

What if the IRS is already taking your paycheck or your bank account?

If this is you: a wage levy is cutting your paycheck, or your bank account was levied. Do this now: call me today. Every pay period counts.

Under IRC 6343(e), if a levy is on your salary or wages and you and the IRS agree the tax is not collectible, the IRS must release that levy as soon as practicable. The Taxpayer Advocate Service says the IRS generally will not levy your assets or income while the account is in CNC.

If a wage levy is your main problem, see our page on IRS wage garnishment help in Orlando. For a bank levy or a seizure notice, see stopping an IRS levy, bank levy and asset seizure.

Levy already in place? Send me the levy notice. I will tell you which release ground fits your facts and what I would do first.

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What if you have tax returns that were never filed?

If this is you: one or more years were never filed, and you are worried that blocks any relief. Do this now: call me. Do not file anything or call the IRS in a panic.

Expect the IRS to check your filing compliance. IRM 5.16.1.2 says a compliance check is conducted and documented, and that all open filing requirements must generally be resolved and closed appropriately when reporting an account CNC. IRM 5.16.1.2.9 says a compliance check will be made for all hardship determinations and describes how open delinquent-return modules may be resolved in a hardship case. The Taxpayer Advocate Service adds that the IRS may place your accounts in CNC hardship status if you have unfiled tax returns and are in a hardship situation. Either way, I want every required return dealt with before we talk to the IRS.

Missing returns on top of a balance you cannot pay? That is a common combination, and it has an order of operations. I will look at which years are open and tell you what comes first.

Call (407) 531-8705 · Book your free confidential consultation · Request a free confidential consultation online

What if you are already in CNC and your situation has changed?

If this is you: your account was placed in CNC, and now your income went up, you got a new IRS letter, or you owe for a new year. Do this now: call me before you answer the IRS.

How long does CNC status last, and how does the IRS review it?

IRS.gov says there is no fixed time period, and that the IRS may review your financial condition periodically to determine whether you can make payments. IRS Topic No. 202 says that during a temporary delay in collection, the IRS will periodically review your ability to pay. The IRS manual gives an example in IRM 5.16.1.6: allowable expenses are $22,000, the account is reported CNC, and it will be reissued systemically when the taxpayer files a return with income of $28,000 or more. That example is illustrative, not a threshold that applies to you.

The Taxpayer Advocate Service says you will continue to receive an annual bill from the IRS as required under the law, because the debt is still there.

What happens if your income goes up?

IRS.gov says the IRS may resume collection if your ability to pay improves, and the Taxpayer Advocate Service says the IRS may collect the balance if your financial situation has improved when it conducts an annual review of your income. The Taxpayer Advocate Service also says the IRS generally should not levy unless later federal tax liabilities arise to remove you from an uncollectible status, so staying current on new years matters. If your income rises, don’t wait for the IRS to notice. Call me so we can look at the whole picture first.

Got a new IRS letter while in CNC? Send it to me. I will tell you what changed on your account and what your options are now.

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What if a payment plan or a settlement fits better?

If this is you: you can pay something each month, or you want to know whether the debt can be settled. CNC is a pause. Depending on your numbers, another route may fit better. We compare them against your actual numbers.

• Installment agreement (payment plan). IRS Topic No. 202 says you are generally eligible for a Simple Payment Plan if your assessed total balance of tax, penalties and interest is $50,000 or less and the payments will pay the balance by the Collection Statute Expiration Date, and that you must be current on all filing and payment requirements. A Guaranteed Installment Agreement is available if the tax you owe is $10,000 or less, excluding interest and penalties, and you meet the other conditions the IRS lists.
• Partial Payment Installment Agreement. If you cannot afford to full pay by the Collection Statute Expiration Date, a Partial Payment Installment Agreement may be an option. The IRS requires a Collection Information Statement and supporting financial information, will determine whether to file a Notice of Federal Tax Lien, and reviews these agreements every two years.
• Offer in Compromise. IRS.gov describes it as a way to settle a tax debt for less than the full amount owed. The IRS says it may be a legitimate option if you can’t pay your full tax liability or doing so creates a financial hardship, and that it considers your ability to pay, income, expenses and asset equity. Acceptance is not guaranteed. Read more on our Offer in Compromise page.

Not sure which option fits? I will lay CNC, a payment plan and an offer side by side against your numbers and tell you which one I would pursue and why.

Call (407) 531-8705 · Book your free confidential consultation · Request a free confidential consultation online

What does CNC status not do?

• It is not forgiveness. The IRS says you still owe the full amount of your tax debt, and it is not forgiven or cancelled.
• Interest and penalties keep growing. The IRS manual says taxpayers must be advised that interest and penalties will continue to accrue on the account.
• A federal tax lien can still be filed. IRS.gov says the IRS may file a Notice of Federal Tax Lien to protect the government’s interest in your property. Under IRM 5.16.1.2, a Notice of Federal Tax Lien should in general be filed on accounts being reported CNC when the aggregate unpaid balance of assessments equals or exceeds $10,000. IRS.gov explains that a lien attaches to all of your assets and to future assets acquired during the duration of the lien (see Understanding a federal tax lien). The Taxpayer Advocate Service says a filed notice can affect your ability to get credit and your ability to sell property or other assets.
• Your refund may be applied to the debt. IRS.gov says the IRS may apply your federal tax refund to your tax debt.
• It does not pause the ten-year collection clock. The IRS generally has ten years after assessment to collect (IRC 6502(a)(1)). The IRS says the collection period is generally suspended when it is prohibited by law from collecting, and it lists the events that suspend or extend it on Time IRS can collect tax: a pending installment agreement request, bankruptcy, a pending Offer in Compromise, a Collection Due Process hearing request, an innocent spouse claim, combat zone or military service, and living outside the United States for six months or more. IRM 5.1.19.3 covers the same events, and also a Taxpayer Assistance Order. CNC is not on either list. CNC is the IRS’s own decision to hold off, not a legal bar on collection, so time spent in CNC counts toward the ten years unless one of those other events suspends the period. Each tax year has its own expiration date, so we check those dates in your IRS records.
• A new balance can end it. The Taxpayer Advocate Service says the IRS requires current Estimated Tax Payments and Federal Tax Deposits, and that later federal tax liabilities can remove you from uncollectible status.

One thing CNC can help with: passports. IRS.gov says the IRS certifies seriously delinquent tax debts to the State Department and that, generally, the State Department will not issue passports after receiving that certification. IRS.gov lists an account determined to be currently not collectible due to hardship as one it will not certify (see Revocation or denial of passport), and the IRS manual says the IRS will reverse an earlier certification and notify the State Department within 30 days if a certified taxpayer is later determined CNC due to hardship.

What does Peter Kici, EA do?

I am an Enrolled Agent. When a client calls about CNC, the work generally runs in this order:

1. Protect you first. If a levy or garnishment is active, after you sign Form 2848 I contact the IRS and request a hold or a release while we put the case together. Whether the IRS grants it depends on the facts, and I cannot promise a result.
2. Get the facts straight. Pull transcripts, confirm what is owed for each year, and find any unfiled returns.
3. Build the financial statement. Prepare the right Collection Information Statement with the IRS standards applied correctly and the proof to back it up.
4. Pick the right resolution. CNC, a payment plan, a partial payment plan or an offer in compromise, based on your income, expenses, assets and the collection statute.

What you do: bring me the notices and your numbers. What I do: work the case with the IRS and tell you plainly where you stand. If you do not need to hire anyone, I will say so.

For local help, see our Currently Not Collectible help in Orlando page. For a broader look at every option, see our overview of IRS tax relief services, our guide to defending against IRS collection actions, and our Orlando tax debt relief page.

What are the most common questions about IRS uncollectible status?

What is IRS uncollectible status?

It is the status the IRS uses when it decides you cannot pay your tax debt at this time because of financial hardship. The IRS calls it Currently Not Collectible (CNC). It says it has temporarily suspended most collection activities, but you still owe the full amount.

What is the IRS currently not collectible form?

The IRS may require a Collection Information Statement (Form 433-F, 433-A or 433-B) and supporting documents before it approves a delay. We prepare it and handle the IRS for you.

What are the IRS CNC requirements?

Per the IRS manual, a hardship exists if a taxpayer is unable to pay reasonable basic living expenses, and a compliance check is made for all hardship determinations. There is no fixed income cutoff.

Does IRS Form 433-F get you non collectible status?

Not by itself. The form gives the IRS your numbers, and the IRS decides. A statement prepared without the IRS standards in mind can lead to a payment demand instead of CNC, which is why we prepare it.

Does IRS uncollectible status stop interest and penalties?

No. IRS.gov says penalties and interest continue to accrue until you pay your balance in full.

What is the IRS uncollectible status statute of limitations?

The IRS generally has ten years from assessment to collect (IRC 6502(a)(1)). CNC is not one of the events the IRS lists as suspending or extending that period, so the clock keeps running while you are in CNC unless something else, such as bankruptcy, a pending offer in compromise or a Collection Due Process hearing request, suspends it. Each tax year has its own expiration date, so we check those dates in your IRS records.

Can the IRS file a tax lien if I am in uncollectible status?

It may. IRS.gov says the IRS may file a Notice of Federal Tax Lien to protect the government’s interest in your property.

Will the IRS take my refund if I’m in CNC?

It may. IRS.gov says the IRS may apply your federal tax refund to your tax debt.

How long does CNC status last?

There is no fixed time period. IRS.gov says the IRS may review your financial condition periodically and may resume collection if your ability to pay improves.

Is CNC tax relief the same as debt forgiveness?

No. It is a temporary collection delay, not a reduction of the balance. Settling for less is a different process, an Offer in Compromise, with its own eligibility rules.

Your next step is a free confidential consultation with Peter.

The free confidential consultation is a 20 to 30 minute call with me, not an intake rep. I look at where your account stands, walk through which options are realistically on the table and which are not, and tell you plainly if you do not need to hire anyone.

What to bring: the most recent IRS notice (the notice number is printed in the upper right corner), which tax years are involved, and a rough idea of your monthly income and living expenses. If you do not have your records, call anyway. If we work together, the first step is usually a Form 2848 Power of Attorney so we work from the IRS record instead of guesswork.

Who you would be talking to: Peter Kici, EA, an Enrolled Agent and Marine Corps veteran, with 19 five-star Google reviews and a BBB A rating (BBB accredited since 2024).

Choose the easiest way to reach me:

• Call (407) 531-8705
• Book your free confidential consultation
• Request a free confidential consultation online
• Or send a message through our contact page

Free with the consultation: the guide The Ultimate Survival Guide for IRS Tax Issues & Trouble, written by Peter, so you understand the notices and options before we talk. Download it free, no obligation. Results depend on the facts of each case, and nothing on this page is a guarantee of an outcome.

Peter Kici, EA, is an Enrolled Agent licensed by the U.S. Department of the Treasury to represent taxpayers before the Internal Revenue Service (IRS). This page is general information, not advice for your specific situation.