What to know about IRS Currently Not Collectible Status
What is Currently Not Collectible Status?
Currently Not Collectible (CNC) status is also known as Hardship status. When a taxpayer is in hardship status, the IRS cannot collect on the taxpayer’s tax liabilities unless the taxpayer’s financial status changes. This means the IRS will not levy a taxpayer’s assets or income while they maintain this status.
You may qualify for hardship status if it is determined that you cannot pay any of your tax debt without financial hardship. This does not mean your tax debt goes away but it means you don’t have to pay on the debt until your financial situation changes. Interest and penalties still accrue on your tax debt while you are in hardship status.
What can I do to be placed in Hardship Status?
As an individual, a taxpayer can apply for hardship status by completing an IRS form 433-F. This form will require information about the taxpayer’s financial situation so that the IRS can determine their ability to pay. Required information includes personal information, employment information, income information, bank and financial information, copies of bills from three months of expenses, copies of recent tax returns, and possibly other documentation.
The 433-F form is very detailed and can be difficult to navigate. Please reach out to the Indiana Legal Services Low Income Taxpayer Clinic if you would like to explore this option. Our attorneys are experienced in completing these documents.
Not every taxpayer who owes tax debts is a good candidate for Currently Not Collectible status. If you do not qualify, there are other options for getting assistance in paying your tax debts, such as a Payment Plan.
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If you have questions or would like to consult with an attorney, contact the Indiana Legal Services Low Income Taxpayer Clinic at tax.clinic@ilsi.net or (812) 339-7668.
Claire Thiel,
Low Income Taxpayer Clinic Law Clerk