Currently Not Collectible Status

Currently Not Collectible (CNC) is the IRS hardship-protection status. When the IRS places your account in CNC, all active collection actions stop: no levies, no wage garnishment, no bank seizures. The collection statute (typically 10 years) keeps running while you're in CNC — so for some taxpayers, CNC outlasts the debt itself.

How to qualify for CNC

You qualify for CNC when paying any amount toward your tax debt would prevent you from meeting necessary living expenses. The IRS uses standardized expense allowances based on family size, county, and income to determine "necessary."

Typical CNC qualifiers:

• Living on Social Security, disability, or fixed income
• Unemployment or significantly reduced income
• Medical hardship affecting your ability to work
• Allowable monthly expenses exceed your income

What CNC does for you

• Stops levies and garnishments on wages, bank accounts, and federal payments
• Pauses collection notices (you'll still get an annual reminder of the balance)
• Preserves your refund from being seized in most cases (after CNC is granted)
• Protects assets the IRS would otherwise pursue

What CNC doesn't do

CNC does not eliminate the tax debt. Interest and the failure-to-pay penalty continue to accrue (though typically at 6% combined). The IRS may file a Notice of Federal Tax Lien even while you're in CNC. And the IRS will review your finances annually — if your income recovers, they can pull you out of CNC.

CNC vs. Offer in Compromise

Many CNC-qualified taxpayers also qualify for an Offer in Compromise. The strategic question: do you want collection paused (CNC) or the debt resolved permanently (OIC)? CNC is faster to obtain (often days, not months) and requires no upfront payment. An OIC requires money down but ends the debt. A licensed tax professional can run both calculations and recommend the right path.

How to apply for CNC

You request CNC by submitting Form 433-A (or 433-F) showing income, expenses, and assets. The IRS then determines eligibility based on whether your allowable expenses exceed your income. Documentation is everything — paystubs, bank statements, medical bills, and proof of all reasonable expenses make the case.