What is currently not collectible status?
Currently not collectible status is an IRS account designation, not a program. The IRS marks an account "currently not collectible" (CNC) when it agrees that collecting the balance now would create a hardship, which the Internal Revenue Manual defines as leaving you "unable to pay reasonable basic living expenses" (IRM 5.16.1.2.9). While the designation is in place, the IRS stops levies and stops asking for monthly payments. It does not stop interest, penalties, the tax lien, refund offsets or the ten-year collection clock.
Companies that advertise an "IRS hardship program" mean this status. It is free to request, the IRS decides it on a financial statement, and for some people it is the most realistic outcome available, because the balance eventually expires. This article explains what CNC stops and what it does not, how the IRS decides, how to ask, and how it compares with a payment plan or an offer. For the full menu of options when you cannot pay, start with our tax debt relief page.
What does CNC status stop, and what keeps going?
| Stops while in CNC | Continues while in CNC |
|---|---|
| Wage, bank and other levies | The failure-to-pay penalty and interest accrue on the balance |
| Demands for a monthly payment | Any federal refund is applied to the debt |
| Passport certification: an account in CNC hardship status is excluded from "seriously delinquent tax debt" (the 2026 threshold is $66,000) | The IRS may file a Notice of Federal Tax Lien; the IRM says one should generally be filed when the unpaid balance is $10,000 or more |
| Active collection contact from a revenue officer or the Automated Collection System | Balance-due reminder notices such as CP71 continue to arrive |
| The IRS may review your finances later and may resume collection if your ability to pay improves |
Two items in the right-hand column deserve emphasis. The lien is public, attaches to property you own and property you acquire, and affects credit and a future home sale. And the IRS does not forget. The account carries a closing code keyed to an income level, and when a later tax return shows income above that level the account is reactivated automatically (IRM 5.16.1.2.9(14)). Filing every year on time is part of staying in CNC; it is also how the IRS checks.
Does CNC stop the ten-year collection clock?
No, and this is the reason CNC can be the end of a case rather than a pause. Section 6502 of the Internal Revenue Code gives the IRS ten years from the date of assessment to collect. Certain events suspend that period: a pending installment-agreement request (plus 30 days if it is rejected), a pending offer in compromise (plus 30 days), a timely Collection Due Process hearing request, a bankruptcy (plus six months), and an innocent spouse claim. CNC status is not on that list. The clock runs while you are in it.
For a taxpayer with a balance from several years ago, little income and no significant assets, CNC until the collection statute expiration date is the honest answer, and it costs nothing but the lien. For a taxpayer whose income is likely to recover, CNC is a breathing space that ends when the next return is filed, with a larger balance than before. Which one you are is the first question to settle.
Who qualifies for currently not collectible status?
The test is ability to pay, measured the IRS's way. The IRS compares your monthly income with allowable living expenses under its Collection Financial Standards: national amounts for food, clothing, housekeeping supplies and personal care, and for out-of-pocket health care; local amounts, by county, for housing and utilities and for vehicle ownership and operation or public transit. The standards were last revised for financial analyses on or after June 29, 2026. If allowable expenses equal or exceed income, there is no monthly payment to collect, and CNC follows. Expenses above the standards are allowed only if you can show they are necessary for health, welfare or the production of income.
Assets matter too. The IRS can ask whether you could borrow against or sell something, including equity in a home or a retirement account, before it agrees that nothing is collectible. CNC is a finding about now, not a ruling that the debt can never be collected. The IRS will usually also want any missing returns filed before it closes the account; our page on unfiled tax returns explains how to get current.
How do you request CNC status?
- Gather the paper. Three months of pay stubs and bank statements; the lease or mortgage statement; utility bills; health insurance and out-of-pocket medical costs; vehicle payment and insurance; court-ordered payments; statements for every account and asset.
- Complete the financial statement. Form 433-F for a case in the IRS's Automated Collection System (the number on your notice reaches ACS), Form 433-A if a revenue officer is assigned, Form 433-B for a business. The forms are signed under penalties of perjury.
- Run the standards before the call. Know your allowable expenses, your income and the resulting monthly figure. If the figure is positive, the IRS will propose a payment plan instead; you should know that before you hear it.
- Make the request. Call the number on your notice, or 800-829-1040, and ask that the account be placed in currently not collectible status for hardship; a revenue officer takes the request directly. If a final notice of intent to levy is pending, request CNC as the collection alternative on Form 12153, which has a box for "currently unable to pay due to financial hardship." Our guide to IRS collection notices explains the 30-day window.
- Get the result and calendar the dates. Ask for written confirmation, note whether a lien will be filed, and record the collection statute expiration date for every year on the account.
- File on time every year. The annual return is what the IRS reads to decide whether to reactivate the account.
How does CNC compare with a payment plan or an offer?
| Currently not collectible | Simple Payment Plan | Partial-payment installment agreement | Offer in compromise | |
|---|---|---|---|---|
| What you pay now | Nothing | Enough to pay the balance by the collection statute expiration date | What the financial statement shows you can afford | A lump sum, or a short series of payments, for less than you owe |
| Balance limit | None | $50,000 or less in assessed tax, penalties and interest | None | None |
| Financial statement | Yes | No | Yes, reviewed again periodically | Yes |
| Lien | Likely if $10,000 or more | Not required | Possible | May be filed during review |
| Collection clock | Runs | Runs | Runs | Suspended while the offer is pending |
| Fee | None | $29 to $178 depending on how you apply; waived or $43 for low income | User fee | $205 plus 20 percent of a lump-sum offer |
CNC and a partial-payment agreement rest on the same financial statement; the difference is whether anything is left over each month. An offer trades the running clock for a fixed amount and is worth considering when the statute has many years to run and you have some ability to pay. The arithmetic behind these choices is in our article on the IRS Fresh Start program.
Does Illinois have a hardship status?
The Illinois Department of Revenue has no formal CNC designation. It offers payment plans, and its Board of Appeals can reduce a final liability "if it is likely the full debt cannot be collected" and can waive penalties and interest for reasonable cause, on a Form BOA-1 petition. IDOR can levy and intercept refunds in the meantime, and an IRS CNC determination has no effect on it. Our Illinois Department of Revenue page covers the state side.
Why use an attorney who is also a CPA for a hardship request?
A Form 433-A is a sworn financial statement with legal consequences, and the decision between CNC, a partial-payment plan, an offer and waiting for the statute is a tax calculation and a legal judgment at the same time. Hani H. Khatib, Attorney at Law · CPA · LL.M. (Taxation), prepares the statement, applies the standards, makes the request and handles any Collection Due Process hearing in one engagement. Your conversations with him about your income, assets and any transfers you have made, and his advice on them, are privileged; the financial statement itself goes to the IRS. The tax attorney page describes the first call.
General information as of October 4, 2026; not legal advice; laws change; consult a lawyer about your situation.