Currently Not Collectible (CNC)
Definition
Currently Not Collectible is an IRS status that may temporarily suspend active collection enforcement when a taxpayer demonstrates inability to pay after allowable living expenses. Subject to IRS discretion.
Why This Matters for Tax Relief
CNC status under IRM 5.16.1 involves evaluation of several factors: (1) financial hardship — paying the tax liability causes significant hardship; (2) income vs. expenses — monthly income is insufficient to cover necessary living expenses under IRS National Standards; (3) no ability to pay — taxpayer has no ability to make payments after allowable expenses (there is no fixed dollar threshold defined by IRS; determination is case-by-case); and (4) asset review — the IRS reviews equity in assets, and significant equity may affect the determination. When granted, the IRS generally stops active collection enforcement (levies, garnishments), though notices may still be issued. Interest and penalties continue to accrue, and the account is subject to periodic IRS review. The CSED clock continues to run, which may allow the statute to expire.
2026 Update
The 2026 postponement of IRS Financial Standards (delayed from April to June 2026) means CNC determinations made in Q1/Q2 2026 use the 2025 allowable expense figures. Taxpayers may want to request review once the updated June standards are published.
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Related Terms
CSED (Collection Statute Expiration Date)
The CSED is the expiration date on the IRS's legal authority to collect a tax debt — generally 10 years from the date of assessment under IRC § 6502.
Federal Tax Lien (FTL)
A Federal Tax Lien is a legal claim by the U.S. government against all of a taxpayer's current and future property when a tax debt is assessed, notice is given, and payment is demanded but not made.
Levy (Bank / Wage)
A levy is the IRS's legal seizure of property or rights to property — including bank accounts and wages — to satisfy an unpaid tax debt after notice and demand requirements have been satisfied.