4 Ways To Get "Currently Not Collectible" Status From the IRS

What Is Currently Not Collectible (CNC) Status And Is It Right for Me?

If you're granted IRS currently not collectible status, the IRS will no longer try to collect taxes from you via bank account levies, wage garnishments, or seizures of your other property.

If you can't afford to pay anything toward your IRS tax debt, you'll need to request CNC status. Otherwise, you're at risk of a wage garnishment or having your bank account frozen.

When your account is classified as currently not collectible status, the IRS will still take your tax refund. It may file a Notice of Federal Tax Lien against you, but probably won't unless you owe more than $10,000. It won't engage in other IRS collection activities like levies while you have uncollectible status. 

Is CNC Status Permanent?

Currently not collectible status isn't a permanent solution for most taxpayers. Penalties and interest continue to accrue on your back taxes while you're in non-collectible status.

That said, if your income doesn’t improve before the end of the IRS 10-year statute of limitations for collection and you remain under CNC status during this time, the IRS will write-off your tax debt. CNC status is often the best tax relief measure for those who have a permanent issue affecting their income-earning ability. A permanent disability is a good example of this scenario.  

If your financial situation improves, the IRS may inform you that it intends to restart collection actions. The IRS will have a trigger it refers to as a “closing code” to revoke currently not collectible status if your income reaches a certain level. 

If you're granted non-collectible status, it's a good idea to ask the IRS for information on the code assigned to you. If you're assigned a revenue officer, ask that officer. If you're not assigned a revenue officer, call the number that's on the notices you're receiving.

What if Your Financial Situation Improves?

If your financial situation has improved, the IRS may notify you that it plans to restart collection activity. Even if you don't file an income tax return, the IRS will know about any income you receive that's reported on a W-2 or 1099. 

If your income increases and triggers a closing code, you'll need to contact the IRS about an installment agreement or other settlement option. Of course, something else could have changed in your life that would allow you to keep your non-collectible status despite an increase in your income, such as having a new dependent.

If your financial situation will improve soon and you will have to start repaying the IRS, requesting CNC status might not be your best option.  There are better tax settlement solutions for most taxpayers long-term, even if CNC status serves as a helpful, temporary stopgap.

These solutions include:

• Installment agreements

• Partial payment installment agreements (PPIA)

• Offers in compromises (OIC)

When Does the IRS Grant CNC Status?

The IRS may agree to place your account in Currently Not Collectible (CNC) status if you can show that paying your back taxes would cause serious financial hardship. This means more than just having a tight budget or feeling stressed about money. The IRS usually only grants CNC status when making any payment toward your tax debt would keep you from covering basic living expenses like rent, food, utilities, or medical care.

Also, getting CNC status isn’t automatic. You’ll need to show the IRS that you can’t afford to make payments. In most cases, the IRS wants to see that even a small payment — like $25 a month — would cause a financial strain.

If you can afford a small monthly payment but not the full amount you owe, many people look into something called a Partial Payment Installment Agreement (PPIA). This allows you to pay a smaller amount each month without causing hardship, while still working toward settling your tax debt.

Here are four common reasons the IRS agrees to grant CNC status.

The IRS Is Running Out of Time To Collect

The IRS usually has 10 years from the date your taxes were assessed to collect the debt. This is called the Collection Statute Expiration Date (CSED).

If there’s only a short time left on that clock, and you can’t afford to make payments without struggling to meet your basic needs, the IRS may agree to grant CNC status. They know that starting a payment plan in that short window may not be realistic if it causes financial hardship.

Your Only Income Is From Government Assistance

If you rely entirely on programs like Social Security, disability benefits, SNAP (food stamps), or public housing, the IRS knows your income is limited. In many of these cases, people don’t have any extra money left over to make payments on back taxes. That’s often enough to show financial hardship.

But keep in mind: CNC status isn’t forever. If your income increases or your situation improves, the IRS may review your case and try to collect again.

You're Unemployed and Only Receiving Unemployment Benefits

Losing your job can create a sudden drop in income. If your only income is unemployment compensation, the IRS may agree that it’s not the right time to try to collect. This is especially true if using those benefits to pay back taxes would keep you from affording rent, groceries, or medical care.

You're Facing Another Type of Financial Hardship

There are many reasons people struggle to pay their taxes. Serious illness, disability, or a major drop in income can all qualify as financial hardship. The IRS will usually ask for proof of your situation, such as income details, monthly expenses, and any assets you own. They want to confirm that making even a small monthly payment would cause real difficulty.

How Do You Prove Financial Hardship?

To qualify for Currently Not Collectible (CNC) status, you’ll need to show the IRS that paying your tax debt would cause you serious financial hardship. You do this by submitting financial information using IRS Form 433.

There are different versions of Form 433, but in most CNC cases, the IRS will ask for Form 433-F (Collection Information Statement). This is the simplest version—just two pages long.

On this form, you’ll list your income, expenses, debts, and assets. You’ll also need to provide documents to back up the numbers, like pay stubs, bank statements, utility bills, and rent or mortgage statements.

Once the IRS has your completed form, they’ll compare your monthly income with your allowable living expenses to see if you can afford to make any payments.

What Are Allowable Living Expenses?

The IRS doesn’t just go by what you spend—they use national and local standards to set limits on what they consider “necessary” living expenses. These guidelines include:

• National standards for food, clothing, and out-of-pocket medical expenses.

• Local standards based on where you live and your household size for housing, utilities, and transportation (including car ownership and operating costs).

• Other necessary expenses, like health insurance, life insurance, and childcare, may also be considered.

If your income—after these standard expenses—isn’t enough to make even a small payment toward your tax debt, the IRS may decide to place your account in CNC status.

Let’s Summarize…

CNC status can help if you truly can’t afford to pay your tax debt. While you're in CNC, the IRS won’t garnish your wages or freeze your bank account, but they may still file a lien. Penalties and interest keep adding up, and if your finances improve, the IRS can remove you from CNC and resume collection.

For most people, CNC is a temporary fix. It may be a longer-term solution if your income is unlikely to improve before the IRS's deadline to collect (the CSED).

If your situation gets better, it’s common to explore other options like an installment agreement, partial payment plan, or an offer in compromise. These can reduce or even wipe out your tax debt—something CNC status doesn’t do unless the CSED runs out before your finances recover.