Currently Not Collectible

If you're facing severe financial hardship and can barely make ends meet, the Currently Not Collectible (CNC) status offered by the IRS may provide temporary relief. NY Tax Solvers can help you determine if you qualify for this program and guide you through the process of obtaining CNC status.

The Currently Not Collectible status is assigned to taxpayer accounts that the IRS acknowledges cannot be collected from at the moment. This designation temporarily stops all collection efforts by the IRS, giving you a break from the stress of debt collection. However, it's important to note that CNC status does not eliminate your tax debt; you may still be required to pay it in the future through full payment, installment plans, or other arrangements like an Offer in Compromise.

To qualify for Currently Not Collectible status, you need to demonstrate that you cannot afford to make any tax debt payments. The IRS will assess your current net income, deducting necessary expenses to determine if any discretionary income is left. The calculations take into account maximum expense standards based on factors such as the number of dependents and your county of residence. Qualifying for CNC status is more likely if you rely on Social Security benefits, welfare, or unemployment benefits.

It's essential to be up-to-date on all your tax returns, including prior years, unless your situation is extremely dire. Collecting financial information such as bank statements, pay stubs, and expense details will strengthen your case for Currently Not Collectible status.

Once approved, the IRS typically allows you to stay in the Currently Not Collectible status until certain triggering events occur. These events may include failing to pay current taxes, reaching an income level above the IRS threshold for making payments, or accumulating funds from asset sales or property. The IRS may also periodically re-evaluate your status, requiring updated financial information every two years to ensure your financial condition has not improved.

It's important to note that Currently Not Collectible status does not reduce your tax debt or halt the accumulation of interest. The IRS can still withhold tax refunds and place a federal tax lien on future assets until your debt is paid. However, CNC status can provide much-needed relief from account levies or wage garnishments when you have no means of paying the IRS.

While CNC may not be the best option for everyone, our professionals can help assess your financial situation and explore alternatives such as installment payment plans or Offers in Compromise. Choosing the right path depends on your specific circumstances and goals. Contact NY Tax Solvers today to find relief from your tax debt through Currently Not Collectible status or other suitable options.