Currently Not Collectible

There are times where you agree with the IRS that you owe taxes, but you can’t pay due to your current financial situation. If the IRS agrees that you can’t both pay your taxes and your reasonable living expenses, it may place your account in Currently Not Collectible (CNC) (hardship) status.

While your account is in CNC status, the IRS will not generally engage in collection activity.  For example: It won’t levy on your assets and income. However, the IRS will still charge interest and penalties to your account, and may keep your refunds and apply them to your debt. 

Before the IRS will place your account in CNC status, it may ask you to file any delinquent tax returns.

If you request CNC status, the IRS may ask you to provide financial information, including your income and expenses, and whether you can sell any assets or get a loan.

If your account is placed in CNC status, during the time it can collect the debt the IRS may review your income annually to see if your situation has improved . Generally, the IRS can attempt to collect your taxes up to 10 years from the date they were assessed, though the 10-year period is suspended in certain cases. The time the suspension is in effect will extend the time the IRS has to collect the tax.

Because the IRS won’t suspend interest and penalty charges, even if it stops trying to collect the balance due, you may want to consider other possible payment options within your means before asking the IRS to place your account in CNC status.

Don’t ignore the notices you get from the IRS about balances due.

If you decide to request currently not collectible (CNC) status, you should:

  • File tax returns for prior years (if you were required to file a return).
  • Continue to file your returns on time even if you can’t pay. This will prevent late filing penalties.
  • Gather your information to verify your income, expenses, and any debts you owe on your assets (loans). You may need to provide the IRS this financial information so it can decide whether to grant your request.

To see if you qualify for currently not collectible status, you'll need to contact the IRS.

If you got a notice, use the information included there.  If you don’t have or have lost your notice, call the following toll free numbers for assistance:

  • Individual taxpayers: 800-829-1040 (or TTY/TDD 800-829-4059)
  • Business taxpayers: 800-829-4933

If the IRS decides you can make some type of payment and you still disagree, you may:

  • Request a conference with the IRS Collection Manager. IRS employees are required to give you the name and phone number of their supervisor.
  • Hire an attorney, certified public accountant (CPA), or enrolled agent (EA) to represent you. If your income is below a certain level, you may qualify for assistance from a Low Income Taxpayer Clinic.
  • Appeal certain collection actions the IRS is taking or proposing. See IRS Publication 1660, Collection Appeal Rights.

Contact the Taxpayer Advocate Service, if your problem is causing financial difficulty for you, your family, or your business; or you face (or your business is facing) an immediate threat of adverse action.

While applying for currently not collectable (CNC) status

  • The IRS may ask you to file any delinquent 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 433B, Collection Information Statement for Businesses, before making any collection decision.
  • The IRS may require documentation to support items listed on your Collection Information Statement.
  • The IRS will continue to charge monthly late payment penalties and interest on your account.

If the IRS places your account in currently not collectable status

  • The IRS may keep your tax refunds and apply them to your debt. 
  • If the IRS places your account in CNC status, you can still make voluntary payments.
  • If your account is placed in CNC (hardship) status, the IRS should not levy your assets or income.
  • The IRS may file a Notice of Federal Tax Lien even if your account is placed in CNC (hardship) 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.

What if I still can’t pay in the future?

If your account is placed in CNC status and 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 can pay. Make sure you have all the information about your income and expenses before you call.

Prevent future tax liabilities by adjusting your withholding or making estimated tax payments.

Have a different tax issue?  Browse common issues and situations at Get Help.

Is your tax problem more complex?  If your issue is causing you financial hardship, you have tried repeatedly and are not receiving a response from the IRS, or you feel your taxpayer rights are being violated, consider contacting Taxpayer Advocate Service (TAS).

Do you feel that you need help from a tax professional but can’t afford one? You may be eligible for representation from an attorney, certified public accountant (CPA), or enrolled agent associated with a Low Income Taxpayer Clinic.

Last modified June 21, 2017