What Is Currently Not Collectible?
Currently Not Collectible, also known as CNC, is a status the IRS gives you when they’ve determined that you can’t pay your tax debt. You keep the Currently Not Collectible status indefinitely until your financial status improves.
A CNC simply stops the IRS from forcefully collecting your tax debt. However, you should know that it doesn’t stop your interest and penalty fees from accruing each month.
This allows you and a tax professional more time to pay the IRS back what you owe.
In the meantime, the IRS will not garnish your wages, place tax liens or levies on your bank accounts or wages, or require you to pay via installments. It is a temporary hold until your financial situation allows you to pay back your debt.
While they stop collecting from you, they will take any tax return refunds you qualify for until your balance is paid off.
They may also place a lien on your property, which tells the credit bureau that you have an outstanding balance with the IRS. There is still a lot the IRS can do while you’re on a CNC, but a tax professional can help you navigate through it all and even avoid liens or levies.
Eligibility Requirements of Currently Not Collectible
Income
In order for you to qualify for a CNC, you must prove that paying your taxes will place you in financial hardship. The IRS defines financial hardship as unable to pay basic living expenses such as rent, bills, transportation if you were to pay taxes. You must make less than $84,000 per year and have little or no income after paying for basic necessities.
Expenses
Basic necessities include but are not limited to
- Food, clothing, housekeeping supplies, personal care products, and miscellaneous items
- Out-of-pocket health care expenses
- Housing and utilities
- Transportation
Why You Want to Be in The Currently Not Collectible Program
The Currently Not Collectible Program is a huge relief for those who qualify. It eliminates the burden of the IRS knocking on your door with letters about wage garnishment, levies, and asset seizures.
You won’t have to pay your tax debt as long as you can prove they are unpayable with your income. During your CNC status, the IRS 10-year Statute of Limitations will continue to run and your tax debt will be eliminated if your financial status does not change during that time.
Currently Not Collectible Forms
To apply for the CNC program, you must submit the proper documentation. The CNC is one of the hardest tax relief programs to qualify for, so submitting the right paperwork and submitting them correctly will ease the process. You can receive help from tax professionals about paper submissions and maintaining communications with the IRS.
When you speak with one of our America’s Choice tax professionals, we can send you everything you need to submit to the IRS. Below are a few documents we’ll need from you to ensure that the CNC submission runs as smoothly as possible!
Supporting documents
Bills Owed
Canceled Checks
Invoices
Bills Paid
Deposit Slips
Do I Need A Tax Professional to File for A CNC?
It is way more convenient and easier to rely on a tax professional to fix your tax problems. They know the IRS, the tax laws, and tax relief programs like the back of their hand. They help people every single day file for the relief they need.
America’s Choice Tax can answer all your questions about your tax situation. We’ll guide you through your eligibility, the paperwork, and we’ll even speak with the IRS on your behalf!