Currently Not Collectible (CNC)
Temporarily Halt Collections Through a CNC Status
When financial hardships make it impossible to pay off tax debts to the IRS, stress and anxiety can seem insurmountable. Through the Currently Not Collectible (CNC) status, tax payers can temporarily relieve tax collections. Consults with our experienced team of tax collectors to determine whether the CNC tax program is right for your financial situation.
What is Currently Not Collectible (CNC) Status?
CNC status is a temporary reprieve granted by the IRS to taxpayers who are unable to pay their tax debts due to financial hardship. When a taxpayer is designated as CNC, the IRS suspends its collection activities, such as wage garnishments and bank levies, allowing the individual to focus on essential living expenses without the immediate pressure of IRS enforcement actions.
Apply for Currently Not Collectible Status with IRS
Our tax consultants are equipped with the experience and understanding of the IRS’ requirements necessary to successfully apply for the CNC status. To apply, you must go through the following steps:
- Gather Financial Information: Collect documentation of your financial situation, including pay stubs, bank statements, monthly bills, and any other relevant financial records.
- Complete Form 433-F or 433-A: Fill out the appropriate collection information statement form, detailing your income, expenses, assets, and liabilities.
- Submit Your Application: Contact the IRS to discuss your financial hardship and submit your completed form. You can do this by calling the IRS directly or working with a tax professional who can assist you in preparing and submitting your application.
Qualifying for CNC Status
To qualify for CNC status, a taxpayer must demonstrate that paying their tax debt would cause significant financial hardship, making it impossible to cover necessary living expenses. This involves providing comprehensive financial information to the IRS, including details about income, expenses, assets, and liabilities. Typically, this information is submitted using Form 433-F, Collection Information Statement, or Form 433-A, Collection Information Statement for Wage Earners and Self-Employed Individuals.
What Happens After CNC Status is Granted?
Once CNC status is granted, the IRS will cease its collection efforts, providing temporary relief from levies, garnishments, and other enforcement actions. However, it’s important to understand that CNC status does not forgive or eliminate your tax debt. Interest and penalties will continue to accrue on the outstanding balance.
Duration and Review of CNC Status
CNC status is not permanent. It lasts as long as the taxpayer remains in financial hardship. The IRS will periodically review your financial situation, typically every two years, to determine if your circumstances have changed. If your financial situation improves, you may be required to start making payments toward your tax debt.
Impact on Future Tax Refunds
While in CNC status, the IRS can still intercept your future federal tax refunds and apply them to your outstanding tax debt. This is known as the Treasury Offset Program (TOP). State tax refunds may also be affected.
Reporting Changes in Financial Situation
If your financial situation improves while you are in CNC status, it is your responsibility to inform the IRS. Failure to report changes in your financial status can result in penalties and the resumption of collection efforts.
Currently Not Collectible status can provide significant relief for taxpayers facing financial hardship, offering a temporary pause on IRS collection activities. However, it is crucial to understand that CNC status is not a permanent solution and does not eliminate your tax debt. By staying informed about your obligations and maintaining open communication with the IRS, you can manage your tax debt more effectively and work towards a more stable financial future. If you are struggling to pay your tax debt, consider seeking the assistance of a tax professional who can guide you through the process of applying for CNC status and help you explore other potential solutions.
Contact Priority Tax Relief at 888-708-2872 to learn more about Currently Not Collectible and schedule a consultation.
Cancellation: Any cancellation of services must be made in writing and delivered to 400 S. Jefferson, Suite 100, Spokane, WA 99204 within three business days of the date of this agreement. If the client cancels services during this time, Company, reserves the right in its sole discretion to convert the agreed fee payment structure to an hourly one by which Client agrees to pay Company an hourly rate of five hundred fifty dollars an hour, entitling Client to a refund of up to fifty percent of all monies paid beyond the ten day money back guarantee in cases where no aggressive collection action is in place.