Playbook
Currently not collectible status from the practitioner’s side
Short answer
Currently not collectible status pauses most IRS collection when a taxpayer cannot pay basic living expenses. The debt is not forgiven, penalties and interest keep accruing, a lien may be filed, and refunds are offset. The practitioner documents hardship on Form 433-F or 433-A. The collection statute generally keeps running.
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When is CNC the right recommendation?
When allowable expenses under Collection Financial Standards meet or exceed income and the taxpayer has little equity. If the CSED is near, CNC can let the statute expire. If the client’s finances will improve, an installment agreement may be more durable.
What does the IRS ask for?
- Form 433-F, 433-A, or 433-B
- Proof of income
- Monthly living expenses
- Bank statements
- Property and asset information
Questions practitioners ask
- How long does CNC status last?
- There is no fixed period. The IRS may review the taxpayer’s finances and resume collection if their situation improves.
- Will the IRS keep a client’s refund in CNC?
- Yes. Refunds are applied to the unpaid debt.