Currently not collectible (CNC) status is one avenue for delaying the payment of your tax debt and getting more time to work out a payment schedule. While currently not collectible status will not eliminate the debt that you owe, nor will it stop penalties and interest from accumulating, it will stop collection methods. If you are concerned about liens or levies on your property, filing for currently not collectible status can resolve this for a matter of time. CNC status has other advantages that may be suitable for your situation.
Currently not collectible status means the IRS has assessed your situation and found that paying your tax debt would impose significant economic hardship on you. CNC status is determined through your income and expenses. If, for example, you are paying significant medical bills and you are unable to work, the IRS may determine that you cannot make additional payments at this time. There are many other situations which may qualify you for CNC status. In general, if your expenses are too great and your income does not leave you with money to pay off your tax debt, you can qualify for CNC status.
While CNC status will not stop interest and penalties from accumulating, it will stop collection calls, liens, and levies. CNC status will also give you more time to pay off your debt. If you are struggling with economic hardship or a personal crisis that has rendered you temporarily unable to work, filing for currently not collectible status will allow you to organize your other affairs without worrying about calls, visits, wage garnishments, liens, or levies from the IRS.
CNC status is not permanent, and it is contingent on your ability to pay at any given time. The IRS will review your case each year and make a determination about your ability to pay. If, for example, you situation improves and you are able to go back to work or you have fewer expenses, the IRS will withdraw your currently not collectible status. At this stage, you can make a payment plan such as an IRS installment agreement. If you situation changes significantly at any time, the IRS can file for liens or levies to placed on your property or bank accounts, so it is important to organize your finances accordingly and to make a payment plan as soon as you are able.
If you have delinquent taxes, you will need to file these before currently not collectible status can be used. We can help you file your back taxes while filing for currently not collectible status, if this is the ideal option for you.
Before making a tax resolution strategy, we will examine your situation closely and determine what is the best way to move forward. If currently not collectible status is found to be an advantageous position for you, we will help you file. Currently not collectible status can be used in combination with other tax solution methods in order to stop collection calls and harassment, reduce tax debt, and make an organized payment plan.