Do I Qualify for Currently Not Collectible Status?

On: April 16, 2023

Not being able to pay your bills can have a negative effect on you. Constant stress and worry over your financial situation are overwhelming and lead to a decline in the quality of your life. 

Receiving a large tax bill from the IRS can cause you additional worry, further financial strain, and extra stress that you do not need. When you find yourself in a situation such as this, you need to turn to a team of experienced IRS tax experts who can assist you. Not only can they guide you, but they can explore additional payment options with you to ensure that you can afford to keep food on the table and meet your debt obligations at the same time. 

What Does Currently Not Collectible Status Mean?

The IRS wants their money and there is no getting around that. However, the IRS does understand that not everyone can afford their tax debt. 

When you have little or no income, you may qualify for a status referred to as Currently Not Collectible or CNC through the IRS. What this means is that, if approved, you will temporarily be alleviated from collection activity by the IRS and permitted to not pay the current tax debt at that time. This does not mean that the debt goes away, but rather that the debt is unable to be collected at the moment. 

If you are approved for CNC status, you do not have to worry about IRS wage garnishments, liens, or levies either. 

Working with a tax professional at Leading Tax Group is critical if you are unable to pay your tax debt. We can assist you in determining if you qualify for CNC or any other options you may have available to you. 

What Happens if Currently Not Collectible Status Is Approved?

All collection activity with the IRS will cease if you are placed into a CNC status. If you already have levies, liens, or garnishments in place, they will be stopped. 

As we mentioned above, it is important to remember that your debt does NOT disappear through CNC but rather it is placed on hold. The IRS is recognizing that you are not able to pay your debt at this time. 

Is Everyone Eligible for CNC Status?

No. There are eligibility requirements that you must meet to qualify for IRS CNC status. Your tax team can walk you through what those requirements are. 

Can the IRS Reject My Request for CNC Status?

Yes. The IRS does not have to accept your request for CNC status and can reject the request if they believe that you are able to pay your tax liability. 

Should your request get denied, you do have options. A tax professional can assist you in exploring what options are available to you. 

Will Penalties and Interest Stop Collecting While in CNC Status?

No. The IRS can and will continue to assess interest and penalties on your account while it is in the CNC status. It is also possible that the IRS will hold any tax refunds you may be owed to help pay down the taxes you owe. 

Leading Tax Group Can Assist You in Applying for the IRS’s CNC Program 

It is important to be as proactive as possible when it comes to any outstanding tax debt you may have. The IRS has measures they can take to collect on a tax debt, so it is best to stay one step ahead of them and not one step behind them. 

Currently Not Collectible status is available to taxpayers who are unable to pay their tax debt and meet certain criteria. The experts at Leading Tax Group can help you determine if you qualify for this program and if not, what options you do have available to you. 

Our team consists of a retired tax attorney, a retired IRS auditor, and a tax accountant. We understand the IRS’s requirements and programs thoroughly and can provide you with the guidance and assistance needed to make your tax debt affordable. 

If you would like to discuss CNC status, see if you qualify, or apply for the program, reach out to Leading Tax Group today.