Currently Non-Collectible
Who Qualifies For Currently Non-Collectible (CNC) Status?
Do you want a break from the stress of dealing with the IRS? Then, you might have one option. “Currently Not Collectible” is a special status for people who can’t pay their taxes because of their current financial situation. And if the IRS agrees that you can’t pay your taxes and basic living expenses, they might temporarily suspend collection efforts on your tax debt. However, to qualify for CNC status, there are certain requirements that you need to fulfill, and it’s important that you are aware of the potential benefits and drawbacks of this option.
Learn about Currently Non-Collectible Status
Currently Not Collectible status is like a short break from paying taxes. It’s basically for people who have demonstrated that collections have put them through economic hardship and cannot afford to pay their taxes back. To get this status, you need to show the IRS that it’s hard for you to pay taxes and present papers about how much money you make, how much you spend, and what things you own. If the IRS agrees, they will stop asking you to pay the money for some time. But remember, they will charge extra money for penalties and interest. Hence, it’s important to know all the pros and cons of non collectible status before choosing it.
CNC Status Request Procedure and Benefits
Determine whether you qualify for CNC Status
To qualify for IRS Not Collectible status, you must show that you are having a tough time with money, and paying taxes would make things tougher. To confirm this, you can show them papers that provide details of the money you make, how much you spend, and what you own. The IRS will look at your financial situation and decide if you can have CNC status. If it turns out yes, they will stop asking for the tax money temporarily. However, they will keep adding money for interest and penalties. So, before you choose this option, think carefully about it.
Gather all Important Papers
By now, you might be aware that to get IRS Currently Not Collectible status, you need to present a few documents about your financial situation. These documents basically stand as proof of how much you earn ( pay stubs) and how much you spend, like rent, utilities, and doctor bills. At the same time, you need to include details about the things you own, like bank accounts, investments, property, and more. So, before sending your request to the IRS, make sure you gather all this information.
Submit your Request for CNC status
To get the Currently Not Collectible status, you need to send a request to the IRS. While submitting your request, you should include all the gathered documents to present your current financial situation. If the IRS agrees, you won’t have to pay any taxes. However, more money for interest and penalties will be added. Remember, this status only lasts for a while, as the IRS might check your financial situation again to check whether you can pay.
FAQ
Looking for some quick answers regarding Currently Non Collectible? Go through some of our FAQs.
How is CNC status beneficial?
Non Collectible Status IRS is a relief for all those individuals who cannot pay taxes because of their financial situation. Also, with the help of this status, you can get a few benefits that include a temporary break from tax payments and protection from the collection actions such as bank levies and wage garnishment. Apart from these, if the IRS approves the CNC status request, they will not file any tax lien against you. However, it’s important to remember that interest and penalties will continue to accrue during this period, and the IRS might even review your financial status periodically to determine whether you can make payments.
How long can I stay in CNC status?
What If I don’t qualify for Currently Not Collectible status?
If you don’t qualify for CNC status, then there are other options available to resolve your tax situation. You can explore the options like installment agreement, offer in compromise, and more to address your tax issues with the IRS.
