Currently Not Collectible
If the IRS determines that you cannot pay any of your tax debt, the IRS may report your account currently not collectible and temporarily delay collection until your financial condition improves. Being currently not collectible does not mean the debt goes away, it means the IRS has determined you cannot afford to pay the debt at this time.
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If you can’t make payments on your tax balance and still pay for your day-to-day living expenses, the IRS may grant you a temporary reprieve.
This deferred payment option is called currently not collectible (CNC) status. It simply means that the IRS isn’t requiring you to make any payments right now. When you request CNC status, the IRS will review your financial situation in detail to determine your ability to pay. The IRS will continue every year that you’re under CNC status. And if your financial situation improves, the IRS will expect you to begin making payments.
There are several important things to consider if you request CNC status:
- If you owe more than $10,000, the IRS will likely file a tax lien as a matter of public record.
- Penalties and interest will continue to accrue on your tax balance.
- The IRS will apply future tax refunds to your tax balance.
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