Currently Not Collectible Status

CNC is a pause, not a settlement

Currently Not Collectible (status 53) is used when the IRS agrees that, after allowed living expenses, you cannot pay. Levies and garnishments stop. The debt does not. Interest and penalties accrue, refunds are offset, and a lien may still be filed. The collection statute keeps running, which is sometimes the entire strategy: survive until CSED.

What you have to show

• Necessary living expenses exceed income under IRS Collection Financial Standards
• No equity the IRS can reasonably levy (or equity that would create hardship if forced)
• Complete income, bank, and expense documentation — typically Form 433-F, 433-A, or an ACS interview

How it is granted

1. File all returns. CNC is not a substitute for unfiled years.
2. Complete the collection information statement honestly. Hidden accounts are how CNC is reversed and a levy follows.
3. The IRS assigns a closing code and a review date. Many accounts are surveyed when a new W-2 or 1099 posts.
4. If income recovers, expect a call to start an installment agreement.

Living with CNC

• File and pay going forward. A new balance can take the account out of hardship.
• Tell the IRS if you move. Returned mail is treated as a skip case.
• CNC is compatible with later OIC or IA if facts change. It is also compatible with a lien that still affects refinancing.