Currently Not Collectible (CNC) status, also known as Uncollectible Status, is a temporary relief designation that the IRS grants to taxpayers who are unable to pay their tax debt due to financial hardship. When a taxpayer is placed in CNC status, the IRS suspends all collection actions, including levies and wage garnishments, giving the taxpayer time to recover financially.
To qualify for CNC status, taxpayers must demonstrate that paying their tax debt would create a significant financial burden, making it impossible to meet basic living expenses. Taxpayers must provide detailed financial information to the IRS, typically using Form 433-A or Form 433-F, to prove that they are unable to pay.
While CNC status halts collection actions, the tax debt remains in place, and interest and penalties continue to accrue. CNC status can be reviewed periodically, and if the taxpayer’s financial situation improves, the IRS may resume collection efforts.
CNC status is a valuable option for taxpayers facing severe financial hardship, but it should be viewed as a temporary solution while exploring long-term options for resolving the tax debt, such as an Installment Agreement or Offer in Compromise.