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Documentation

  • Understanding Your Options
  • How to Choose a Program
  • IRS Program Overview
  • Currently Not Collectible
  • Offer in Compromise
  • Installment Agreements
  • Form 433-A Guide
  • Form 656 Guide
  • CDP Hearing Requests
  • Penalty Abatement
  • IRS Decision Priority
  • Collection Actions
  • Statute of Limitations
  • Frequently Asked Questions

Currently Not Collectible (CNC)

CNC status temporarily pauses IRS collection when paying would cause economic hardship. Your debt remains, but the IRS stops collection activities.

Important Notice

CNC is temporary relief, not debt forgiveness. Interest continues to accrue, and the IRS will periodically review your financial situation.

What is CNC Status?

Currently Not Collectible (CNC) is an IRS designation that means collecting from you would cause economic hardship. When granted CNC status:

  • The IRS temporarily stops all collection activities
  • No monthly payments are required
  • Levies and garnishments are released
  • Your debt remains on record and interest continues
  • The 10-year collection statute continues to run

Who Qualifies for CNC?

You may qualify for CNC if:

  • Your allowable monthly expenses equal or exceed your monthly income
  • You have no significant asset equity to liquidate
  • Paying anything would prevent you from meeting basic living expenses
  • You're experiencing unemployment, illness, or other financial hardship

Example Qualifying Scenario

  • Monthly Income: $2,200
  • Allowable Expenses: $2,400
  • Disposable Income: -$200
  • Asset Equity: $1,000 in checking account
  • Result: Likely qualifies for CNC

How to Apply for CNC

  1. Complete Form 433-F or 433-A - Collection Information Statement showing your financial situation
  2. Gather documentation - Pay stubs, bank statements, bills, proof of expenses
  3. Contact the IRS - Call 1-800-829-1040 or respond to your collection notice
  4. Submit your financial statement - Prove that collection would cause hardship
  5. Wait for determination - IRS reviews and grants or denies CNC status

What Happens After CNC is Granted?

  • Collection activity stops: No more threatening letters or levy notices
  • No payments required: You don't owe anything monthly
  • Interest continues: Your balance increases with interest and penalties
  • Periodic reviews: IRS checks your financial situation every 1-2 years
  • Status can be reversed: If your finances improve, IRS may resume collection

Pros and Cons

Pros

  • Immediate relief from collection pressure
  • No monthly payment burden
  • Stops wage garnishments and bank levies
  • Gives time to improve financial situation
  • Statute of limitations continues (debt may expire)

Cons

  • Debt continues to grow with interest
  • Not a permanent solution
  • IRS will file tax liens (affects credit)
  • Must requalify periodically
  • Collection resumes if finances improve

Alternative Options to Consider

If you're close to qualifying for CNC, also explore:

  • Offer in Compromise - Settle for less if you have minimal assets
  • Partial Payment Installment Agreement - Pay what you can afford monthly
  • Wait for statute to expire - If you're close to the 10-year collection deadline

Get Started with CNC

Ready to apply for CNC status?

  • Check if you qualify using our dashboard tool
  • Start your CNC application in the programs section
  • Access Form 433-A and supporting document guides
  • Get step-by-step instructions for IRS submission