What is Currently Not Status?
Currently Not Collectible Status (CNC) with the IRS means that the IRS has determined that according to their guidelines, the taxpayer does not have the ability to make monthly payments. The taxpayer’s income is used up by or exceeded by allowable expenses and does not have any net equity available to pay the amount owed.
What actions will the government take if the Taxpayer is CNC?
If the government codes the taxpayer’s account as Uncollectible, they still owe the tax and the government may still file a Notice of Federal Tax Lien (FTL) on current or future assets, However, there are some benefits to being in CNC:
- While in CNC, the government won’t but won’t take any levy action, and
- The 10 Year Statute of Collecctions for the IRS continues to run.
Note that it is “Currently” Not Collectible. It is not permanent. The IRS will contact the Taxpayer to Update their financial status from time to time to verify that the taxpayer continues to qualify for CNC status.
How Do obtain Currently Not Collectible Status
The Taxpayer will complete a Form Form 433 and file it with the IRS Collection Division. The 433 is a form that collects financial data of the taxpayer to determine if they qualify for Currently Not Collectible status.
Who is a Candidate for Currently Not Collectible Status?
Realistically, anyone who qualifies CNC can use it as an effective Tax Resolution tool but some primary candidates that I have found come to my Richardson, TX office include –
- A taxpayer for whom the 10 year collection statute will expire soon,
- Taxpayers who are not compliant and under threat of levy. While most tax resolution alternatives require the taxpayer be in tax compliance, CNC status does not.
- Primary candidates include taxpayers who don’t qualify for an Offer In Compromise but do qualify as CNC.
If you need help with an IRS Collection issue and need help, we’d be happy to assist you in resolving your issues. Please give me a call at (972) 821-1991 or email me at bob@jablonskyandassociates.
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