IRS Currently Not Collectible: IRS CNC - Rush Tax Resolution

The IRS offers taxpayers experiencing severe financial hardship the option of qualifying for the Currently Not Collectible (CNC) status. It's important to note that this does not mean debt forgiveness. Instead, it's a temporary status that relieves you from the pressure of the IRS collection process.

We may be able to qualify you for this program if you are facing a situation where you do not have any discretionary income to cover basic living expenses. We may even be able to get you protected on this program, even if you have already received a bank levy notice.

Furthermore, we may be able to get your wage garnishment stopped and help protect your bank accounts from IRS action.

Through the Currently Not Collectible CNC status, we can get them to temporarily stop all collections. Call and speak to one of our tax consultants and ask them if you qualify for this program. They will discuss the entire process with you and often walk you through it on the same day.

Put simply, the IRS Currently Not Collectible CNC status is a label put on taxpayer accounts that the IRS generally cannot realistically collect from at this time. If you're struggling financially and can barely pay your bills, let alone worry about your tax bill, then the IRS offers the option of qualifying as CNC to stop any collection efforts.

You will still be asked to pay off your IRS debt at a later point, either in full, via an installment agreement, or as part of an Offer in Compromise, for example.

Filing taxes can be complicated, and even small mistakes can lead to delays, penalties, or unwanted attention from the IRS. One of the most common errors is entering incorrect or missing information, such as Social Security numbers or income details.

Overlooking income sources, like unemployment compensation or freelance earnings, can also cause problems. Mistakes in claiming deductions or credits, or failing to provide proper documentation, may result in penalties or interest charges.

To avoid these pitfalls, it is important to work with experienced professionals who can review your tax docs, ensure accurate tax filing, and help you claim every credit and deduction you’re entitled to. Rush Tax Resolution offers reliable, personalized tax prep and planning services to help you avoid errors and secure your maximum refund. Contact us today for expert help and peace of mind

We offer a free consultation to see if you qualify for the Currently Not Collectible program. Under most circumstances, you must simply demonstrate that you cannot afford to pay at all. Some key things to note:

• The IRS calculates your current monthly income. This is done by deducting any required tax and insurance deductions from your gross pay.
• The IRS looks at all your current expenses to determine what discretionary income is likely left. This can get a bit tricky because the IRS has maximum expense standards for everything. These standards are adjusted based on how many dependents you claim. They are also adjusted by the county that you live in and aligned with basic living expenses.
• The numbers must show that you are unable to afford regular tax liability payments. This is calculated by deducting your allowable expenses from your income. You're more likely to qualify for an IRS CNC if you're living off Social Security benefits, welfare, or unemployment benefits.
• You will have to be up to date on all your income tax return filings, including those from previous years, unless your financial situation is particularly dire.

Be sure to gather as much financial information as you can to accurately make your case for an IRS CNC status, including bank statements, paystubs, expenses, and debts (loan payments, etc.). The IRS will require a Collection Information Statement to evaluate your case.
Be sure to gather as much financial information as you can to accurately make your case for an IRS CNC status, including bank statements, paystubs, expenses, and debts (loan payments, etc.).

An IRS CNC status does not reduce your total IRS debt, and it doesn't affect the rate at which your debt grows with interest. The IRS is also able to withhold any tax refunds that you would otherwise qualify for and use them to reduce your tax liability, and they may place a federal tax lien on any future assets and properties until your debt is paid.

While tax liens no longer directly affect your credit score and won't show up in your credit report, they can affect your ability to seek a loan or credit. But in cases where your more immediate concern is an account levy or wage garnishment, and you have no means of paying the IRS back now, the Currently Not Collectible CNC status can provide much-needed help.

There are drawbacks to consider which might not make CNC the best option for you. If you have the financial means to put some money aside each month, then you may be able to opt for an installment agreement. This may be preferable to trying to drag your debt out, as it will continue to grow even while your account is designated non-collectible.

Alternatively, you may be able to work with us to negotiate an Offer in Compromise with the IRS, paying a reduced tax debt off over several months, if you're unable to pay off the entire debt before it expires.

However, for taxpayers facing overwhelming financial odds – particularly during the ongoing crisis – opting to request CNC status may be your best bet towards getting some much-needed breathing room. Our professionals can help determine if this status is right for you. We can also help you explore alternatives through the Taxpayer Advocate Service if you are encountering unresolved issues with the IRS.