IRS Programs

Currently Not Collectible status

Currently Not Collectible (CNC) is an IRS designation that temporarily pauses collection activity on a tax account. The IRS grants CNC status when it determines that a taxpayer cannot afford to pay their tax debt and cover necessary living expenses at the same time.

What CNC does

When the IRS places an account in CNC status:

• Collection calls and letters stop
• Wage garnishments and bank levies are released or not issued
• The IRS does not require monthly payments
• The 10-year collection statute of limitations continues to run

CNC does not eliminate the tax debt. Interest and penalties continue to accrue. However, if the debt remains unpaid when the collection statute expires (typically 10 years from assessment), it is written off.

How the IRS determines eligibility

The IRS uses Form 433-A (Collection Information Statement) to evaluate the taxpayer's financial situation. The IRS compares the taxpayer's monthly income against allowable living expenses using its Collection Financial Standards, which set limits for housing, transportation, food, and other necessities by geographic area.

If the taxpayer's allowable expenses meet or exceed their income, CNC status may be appropriate.

Who typically qualifies

• Taxpayers with income at or below the federal poverty guidelines
• Individuals experiencing unemployment, disability, or serious medical conditions
• Retirees on fixed income with limited assets
• Taxpayers whose monthly obligations leave no disposable income after allowable expenses

What to expect after CNC is granted

The IRS periodically reviews CNC accounts, typically through annual income checks using filed tax returns. If the taxpayer's income increases significantly, the IRS may remove CNC status and resume collection activity. A federal tax lien may still be filed on the account even while in CNC status.

This information is for educational purposes only and does not constitute tax, legal, or financial advice. Eligibility for IRS programs is determined by the IRS based on individual circumstances. For official guidance, visit IRS.gov.