Currently not collectible: when the IRS hits pause
If paying the IRS anything would mean not covering rent, food or other basics, the IRS can put your account on hold. It's called "currently not collectible" status, and it can give you real breathing room.
The short version
- CNC status stops IRS collection, including levies, while your finances don't allow you to pay.
- The debt doesn't go away, and interest and penalties keep adding up.
- The IRS checks your finances periodically and can resume collection if your income improves.
- The 10-year collection clock keeps running, so some debts expire while in CNC.
1Who qualifies
You may qualify if your monthly income, minus allowable living expenses, leaves little or nothing to pay the IRS, and you don't have significant assets that could be used to pay. The IRS uses its own national and local standards for expenses like housing, food, transportation and health care.
Common situations include job loss, serious illness, living on a fixed income like Social Security, or income that only covers the basics.
2What it does and doesn't do
| CNC does | CNC doesn't |
|---|---|
| Stop levies on your wages and bank accounts | Erase the debt |
| Stop most collection letters and calls | Stop interest and penalties from adding up |
| Let the 10-year collection clock keep running | Stop the IRS from keeping future refunds |
| Give you time to get back on your feet | Prevent the IRS from filing a lien |
3How to apply
- File all required tax returns. The IRS generally requires this first.
- Document your finances. The IRS will usually ask for a financial statement (often Form 433-F or 433-A) and proof of income and expenses.
- Contact the IRS or have a professional do it, and explain why you can't pay. For smaller balances, it can sometimes be handled by phone.
- Keep filing on time. New balances can take you out of CNC status.
Common questions
How long does CNC status last?
As long as your situation doesn't improve, but the IRS reviews accounts periodically, often using your future tax returns. If your income goes up, it may ask you to set up a payment plan.
Can my debt expire while in CNC?
Yes. The IRS generally has 10 years from the date the tax was assessed to collect, and that clock keeps running during CNC. If it runs out, the remaining debt is no longer collectible.
Is CNC better than an offer in compromise?
It depends. CNC is faster and simpler but doesn't reduce the debt. An offer can settle it, but takes longer and has stricter requirements. We'll help you compare.
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Written by Jonathan Samuel, EA, an Enrolled Agent licensed to represent taxpayers before the IRS. This page is general information, not advice for your specific situation.