Currently Not Collectible Status: The IRS Hardship Program Explained

Currently Not Collectible (CNC) status is one of the most underutilized IRS resolution options. If paying your tax debt would create an economic hardship, the IRS can temporarily stop all collection activity.

What is CNC Status?

When the IRS places your account in CNC status:

• All levy and garnishment activity stops
• The IRS stops sending collection notices
• No installment payments are required
• The 10-year collection statute continues to run

This means your debt may eventually expire without you paying a dime (though penalties and interest continue to accrue).

Who Qualifies for CNC?

You may qualify if:

• Your monthly expenses equal or exceed your monthly income
• Paying any amount toward your tax debt would prevent you from meeting basic necessities
• You have minimal assets with no equity
• You are unemployed, disabled, or facing severe financial hardship

The IRS uses national and local standards for allowable living expenses:

• Housing and utilities (local standards)
• Food, clothing, and miscellaneous (national standards)
• Transportation (regional standards)
• Healthcare (regional standards)
• Court-ordered payments
• Childcare for working parents

How to Apply for CNC Status

Step 1: Gather Documentation

• Bank statements (3 months)
• Pay stubs or proof of income
• Monthly bills and expense documentation
• Asset information (home values, vehicle values, retirement accounts)
• Medical expense documentation if applicable

Step 2: Complete Form 433-A

Form 433-A (Collection Information Statement for Wage Earners and Self-Employed Individuals) details your complete financial picture. Accuracy is critical.

Step 3: Contact the IRS or Have Your Representative Call

Call the IRS at 800-829-1040 or have your authorized representative (EA, CPA, or attorney) make the request.

Step 4: Wait for Determination

The IRS reviews your financial information and makes a determination. This can take several weeks.

Important Considerations

The 10-Year Statute

IRS has 10 years from the date of assessment to collect. While in CNC, this clock keeps ticking. If your debt is older, CNC may result in the debt expiring entirely.

Annual Review

The IRS may review your financial situation periodically. If your income increases significantly, they may remove you from CNC and resume collection.

Tax Lien

The IRS may still file a federal tax lien even while you are in CNC status. This protects the government's interest in your assets.

Credit Impact

While in CNC status, any existing tax liens remain. New liens may be filed. This continues to affect your credit.

CNC vs. Other Options

Feature	CNC	Installment Agreement	OIC
Monthly payment	$0	Yes	Initial + remainder
Statute continues	Yes	Yes (with extensions)	Resets in some cases
Collection stops	Yes	Yes	Yes
Best for	True hardship	Ability to pay over time	One-time settlement

Find Help

A qualified tax professional can evaluate whether CNC status is your best option and present your financial situation in the most favorable light. Find an expert near you.