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Currently Not Collectible Status
Suspend IRS Collection When You Cannot Afford to Pay
Currently Not Collectible (CNC) status is a formal IRS designation that suspends collection activity when your income does not exceed IRS-allowed living expenses and you have no available assets to liquidate.
What Is Currently Not Collectible Status?
When the IRS determines that a taxpayer's allowable living expenses equal or exceed their gross monthly income, and the taxpayer has no available assets, it may place the account in Currently Not Collectible status. While in CNC, the IRS suspends levy and garnishment activity.
CNC status does not eliminate the tax debt. Interest and penalties continue to accrue. The IRS reviews the account periodically — typically when the taxpayer files a new return showing increased income — and may resume collection if the financial situation improves.
The most significant benefit of CNC status is that the 10-year Collection Statute Expiration Date (CSED) continues to run. If the taxpayer's financial situation does not improve before the CSED, the remaining liability expires.
The CSED continues to run during CNC status
Unlike an Offer in Compromise (which tolls the statute) or an installment agreement (which does not toll the statute but requires payment), CNC status allows the collection clock to keep running without requiring any payment. For taxpayers with significant remaining statute time, this can be a meaningful strategic advantage.
How CNC Status Is Established
- 1
Compliance verification
All required tax returns must be filed. The IRS will not consider CNC status for a taxpayer with unfiled returns.
- 2
Financial statement preparation
Form 433-A (individuals) or Form 433-F documents income, expenses, and assets. The IRS compares expenses to its National and Local Standards.
- 3
Hardship determination
If allowable expenses equal or exceed gross income and there are no available assets, the IRS designates the account as CNC.
- 4
Periodic review
The IRS monitors the account. A new return showing increased income may trigger a review and resumption of collection activity.
CNC vs. Other Resolution Options
| Factor | CNC | Installment Agreement | OIC |
|---|---|---|---|
| Monthly payment required | No | Yes | Yes (during review) |
| Debt eliminated | No (may expire) | No | Yes (if accepted) |
| CSED tolled | No | No | Yes |
| Lien filed | Possible | Possible | Possible |
| Periodic review | Yes | Yes | No (5-yr compliance) |
What CNC Status Does Not Do
- It does not eliminate the tax debt
- It does not stop interest and penalties from accruing
- It does not prevent the IRS from filing a federal tax lien
- It does not guarantee the debt will expire — the IRS can resume collection if your financial situation improves
- It does not apply to taxpayers with unfiled returns
Related Services
OIC Pre-Qualifier
Not sure whether CNC or an OIC is right for you? Use our pre-qualifier tool to estimate your Reasonable Collection Potential.
Open the toolStart with a Paid Tax Resolution Investigation
Before recommending any resolution strategy, we obtain your IRS transcripts, verify your compliance status, and deliver a written analysis of every option available to you.
No resolution strategy is recommended until we have reviewed your transcripts and financial position. Eligibility depends on your specific facts.