What is Currently Not Collectible (CNC) status with the IRS?

Currently Not Collectible (CNC) status is an IRS designation that temporarily halts all collection activity on your account. When you're placed in CNC status, the IRS stops wage garnishments, bank levies, and asset seizures because they've determined you cannot afford to make any payments toward your tax debt. The IRS grants CNC status when your monthly allowable expenses (using IRS National and Local Standards) equal or exceed your monthly income, meaning you have no disposable income to put toward tax payments. To request CNC status, you must provide detailed financial information on Form 433-A or Form 433-F, including income, expenses, assets, and liabilities. The IRS will verify your financial situation and may require documentation. While in CNC status: penalties continue to accrue (though the failure-to-pay rate remains at 0.5%), interest continues to compound, the IRS may file a tax lien but won't take active collection, and the Collection Statute Expiration Date (CSED) continues to run. If your financial situation hasn't improved when the CSED expires (10 years from assessment), the debt is permanently forgiven. The IRS periodically reviews CNC cases (usually every 1-2 years) by checking your income against the threshold.