Currently Not Collectible Status: A Tax Relief Option Florida Taxpayers Should Know About

Owe the Internal Revenue Service (IRS) money? If you are having trouble paying, there is a little-known relief option that can temporarily stop collection activity. It’s called Currently Not Collectible status.

It is a legitimate IRS program that too many Florida taxpayers never pursue because they don’t know it exists. Our experienced Florida tax and IRS attorney explains how it works and who may qualify.

What Currently Not Collectible Status Does (and Does Not) Do

When a Florida taxpayer can’t pay outstanding federal tax debts, Currently Not Collectible (CNC) status can help protect against wage garnishments, bank levies, and other collection activities.

Common situations that may support a CNC hardship determination include:

• Monthly income that barely covers or falls short of necessary living expenses under IRS allowable expense standards.
• Job loss, unemployment, or a sudden significant drop in household income.
• Serious illness, disability, or ongoing medical expenses.
• Fixed income from Social Security, SSDI, or retirement benefits.
• Financial circumstances where even a minimal monthly payment would prevent you from covering rent, utilities, food, or medical care.

CNC is a pause, not a resolution. It doesn’t forgive or cancel tax debts, and penalties and interest continue to accrue on the unpaid balance. The IRS can also still file a Notice of Federal Tax Lien and seize any future tax refunds.

Applying for CNC Status: What to Expect

To apply for CNC status, you generally need to complete a Collection Information Statement, either Form 433-F for individuals or Form 433-A if you are working directly with an IRS revenue officer. It documents your income, expenses, assets, and liabilities. The IRS then compares that information against its national and local allowable expense standards to determine whether any payment toward your tax debt is feasible.

To be considered for CNC, you must be current on all required tax filings. (Unfiled tax returns are a common reason requests are delayed or denied.) Once you submit the required documentation, here’s what to expect:

• The IRS reviews your financial information and compares your income against allowable living expense standards.
• If approved, collection activity stops, and the IRS sends an annual notice confirming the balance still owed.
• The IRS reviews your case periodically, typically by monitoring your annual tax returns, and may resume collection if your income increases.

It’s important to note that the 10-year Collection Statute Expiration Date continues to run while you are in CNC status. Once you reach that point, the IRS is no longer able to pursue collections.

Request a Consultation With Our Experienced Florida Tax and IRS Attorney

Facing serious financial hardship due to tax debts? Currently Not Collectible status may help provide relief from wage garnishments, property liens, and other collections.

As a Certified Public Accountant and former FBI Special Agent with deep experience in tax matters, Ronald Cutler has spent more than 50 years helping Florida taxpayers in these cases. To find out if CNC is an option, contact our office. Request a consultation with our experienced Florida tax and IRS attorney today.

Source:

taxpayeradvocate.irs.gov/notices/currently-not-collectible/