While applying for CNC status
- The IRS may ask you to file any past due returns.
- The IRS may ask you to complete IRS Form 433-A, Collection Information Statement for Wage Earners and Self-Employed Individuals, or IRS Form 433-F, Collection Information Statement, and/or IRS Form 433-B, Collection Information Statement for Businesses, before making any collection decision.
- The IRS may require documentation to support items listed on your Collection Information Statements.
- The IRS will continue to charge monthly late payment penalties and interest on your account.
- The IRS will require you to continue to make your Estimated Tax Payments and Federal Tax Deposits, on time.
If the IRS places your account in CNC status
- The IRS may keep your tax refunds and apply them to your debt.
- You can still make voluntary payments.
- The IRS shouldn't levy your assets or income, unless later federal tax liabilities arise to remove you from an uncollectible stats.
- The IRS may file a Notice of Federal Tax Lien (NFTL) even if your account is placed in CNC status. The filing of an NFTL can affect your credit rating, and your ability to sell property or other assets.
- The IRS may contact you to update your financial information to be sure your ability to pay hasn’t changed.
- The IRS is required by law to notify the State Department if you are certified as owing a Seriously Delinquent Debt. But, the IRS has discretion to exclude debts from Passport Certification, that are CNC.
What if I still can’t pay in the future?
If the IRS sends you a notice about your tax bill, call the number on the notice to discuss your financial situation. The IRS will take your updated information and decide if you still can't pay your IRS debt and meet your living expenses. Make sure you have all the information about your income and expenses before you call.
You may prevent future tax liabilities by adjusting your withholding, making estimated tax payments or Federal Tax Deposits.
New Tax Reform implementation changed the way the IRS calculates your federal tax. The IRS encourages everyone to perform a quick “paycheck checkup” to ensure you have the right amount withheld.
You may use the IRS withholding calculator to figure your federal income tax and withholding. The withholding calculator is a tool on IRS.gov designed to help you determine how to have the right amount of tax withheld from your paychecks.
When you use the withholding calculator, it will help you determine if you need to adjust your withholding and submit a new Form W-4, Employee’s Withholding Allowance Certificate, to your employer.