What is Currently Non-Collectible Status?
Currently Non-Collectible status is a situation in which the IRS recognizes that the taxpayer does not have the financial ability to pay the tax debt through, full payment, an Installment Agreement or by an Offer in Compromise. Once a taxpayer’s account is in Currently Non-Collectible status the IRS does not seek collection against the taxpayer. Also, while in this status, the statues of limitations on the tax liabilities continue. So, if the taxpayer’s financial circumstances don’t change, the account remains in Currently Non-Collectible status until the tax liabilities expire.
Currently Non-Collectible (CNC) Status is for those in a current financial hardship that prevents them from being able to make any payment to the IRS at this time. CNC, also called Status 53 (referring to the IRS code that is entered on your tax record when you are in CNC), is determined by looking at your current liquid assets, income, and your allowable living expenses. This information is submitted on a Collection Information Statement or Form 433A or F (for a business, a Form 433-B). These statements list assets such as real estate, cars, bank accounts, investments and retirement accounts. You can also list you credit card debt, though they typically do not take that into consideration. You also list your gross income and all your expenses. Although you will show the IRS what you actually spend on these items, keep in mind there are national standards (some based on where you live) for each of these categories: • Housing and utilities • Car payments • Car maintenance, gas and insur
