How to Receive CNC (Currently Not Collectible) Status from the IRS and Settle with the IRS

Can't pay the IRS your back tax liability? You may be eligible for CNC (Currently not Collectible) status and also qualified for an Offer in in Compromise.
March 9, 2011 - PRLog -- The IRS can grant you, the taxpayer, CNC (Currently Not Collectible) Status, when you are found to be unable to pay your back tax debt. When you are  granted CNC (Currently not Collectible) status, the IRS must stop all collection activities and efforts, including levies (the statutory authority of the IRS, to seize property to satisfy a tax liability without going to court) and wage garnishments.

CNC, Currently not Collectible status, can be an enormous relief to individuals with a tax liability who are essentially hounded by the IRS to pay their back tax debt. After CNC (Currently not Collectible) status is granted, the IRS must send an annual statement to the taxpayer stating the amount of tax still owed and to be repaid when the taxpayer is in a better financial situation. Here is how to obtain CNC (Currently not Collectible) status with the IRS.

Read more: How to Obtain CNC (Currently Uncollectible) Status with the IRS at:

In order to receive Currently not Collectible (CNC) status from the IRS you must prove that you do not have any assets that would enable you to pay the back tax debt you owe. You must prove that you have enough money to pay for the very basic necessities of life and nothing else. The necessities of life would include: rent, mortgage,food and clothing, health insurance, car payments, auto maintenance, court ordered payments (child support, etc), secured loans, utilities, etc. These are called allowable expenses.

The process to receive CNC status is complicated and you will need to fill out the Collection Information Statement for Wage Earners and Self-Employed Individuals or Form 433-A, which is used by the IRS to determine your Reasonable Collection Potential on your tax debts.

Remember this: The IRS is the worlds most powerful collection agency and their first task is to collect money. Do not expect the IRS to be "warm and fuzzy" and provide you with a lot of help.

Form 433-A requires the following information:

a. The usual personal information such as: address, phone number, marital status, dependants, whether you own a home or rent etc.
b. Employer and business information including, address, phone number, any and all income for the prior three months, absolutely all expenses etc.
c. You will need to report all your liquid assets including bank accounts, investment accounts, credit card accounts, and insurance policies.
d. Other legal information you need to report to the IRS includes garnishments against your wages, any judgments against you, and whether you have ever filed for bankruptcy.
e. You will need to list all of your vehicles, real estate, personal and business assets.

Form 433-A is a 6 page form that asks a lot of questions and it may take you hours to fill it out completely. Your tax debt relief depends on it. Not to mention that you will sign Form 433-A under penalty of perjury.

Flat Fee Tax Relief suggest that you consult with an experienced tax professional. Flat Fee Tax Relief would have you complete our own financial questionnaire prior to submitting the 433-A. This will offer you your best opportunity at receiving a favorable Currently not Collectible (CNC) ruling.

The following documentation must be provided to the IRS in addition to Form 433-A:
1. Copy of your last tax return
2. Proof of all current expenses for the last three months,
3. Statement of all transportation expenses for the last three months,
4. Statement of health care expenses for the last three months
5. Proof of any court-ordered payments for the last three months

In order to provide the IRS with all the pertinent information/documentation it requires to stop debt collection activities against you, you will need to have kept accurate records and documentation of virtually every financial aspect of your life for a long period of time. Save all receipts, invoices, and statements that illustrate your financial situation. You never know when you may be asked for additional proof of income or expenses.

Should the IRS consider you "currently not collectible", CNC status will usually be for a period of 18 to 24 months. At the end of the Currently Uncollectible period, you, the taxpayer, will need to show the IRS that your economic situation has not changed. As long as you enjoy that status with the IRS, you will not be expected to pay any of the IRS tax debt. Your statutory period (IRS Statute of Limitations) does not freeze/stop. The Statute continues to decrease as usual.

Like anything else with the IRS, proving a Currently Uncollectible status to the IRS is easier said than done, especially for someone who is not familiar with the specific and very detailed method the IRS uses to make their calculations to determine whether or not you can make payments and how much you have to pay.

If you are cannot pay your back tax debt, you should also look into settling your entire tax liablity.

Logic tells you that being unable to being able to make payments puts you in a place where an IRS Settlement through the Offer in Compromise program should be the next step.

The IRS has eased their requirements for an IRS settlement via an Offer in Compromise.

The IRS said it believes the changes to the Offer in Compromise program "will help people trying to get right with their taxes, and we think it strikes the right balance to protect the interests of the government," said Doug Shulman, the IRS commissioner.

If you cannot pay your back tax debt, settle it all at once and be done with it.

Flat Fee Tax Relief provides diligent, experienced and affordable IRS representation.

•   Experienced Tax Attorneys
•   Lower fees - higher value
•   Integrity, credibility, personal service & results
•   No Salesman - No Pressure

•   Fixed with no hidden charges
•   Payable in monthly installments
•   Low initial payment to begin work
•   Always competitive and affordable

Flat Fee Tax Relief keeps our fees low, fair and reasonable because we do not employ sales people who will take 20 to 25% of your precious retainer fees. Flat Fee Tax Relief also does not spend money on expensive television ads. Most of our new clients are referred to us by our very satisfied clients.

If you qualify for an IRS Settlement through the IRS Offer in Compromise (OIC) program, you can "get your life back", you can save thousands of dollars in taxes, penalties and interest. Taxpayers can have IRS Tax Debt on all types of taxes, including most payroll taxes, penalties, and interest. It is the closest thing to amnesty that the federal government offers in connection with back tax debt.

Taxpayers should bear in mind however, that the IRS Offer in Compromise program or IRS Penalty Abatement program is a privilege, not a right such as bankruptcy. That being said, it is a very subjective process. The IRS has the final word. The IRS Offer in Compromise (OIC) process is a very complicated drawn out process that can take upwards of nine months to a year and even longer. There are IRS guidelines, rules and protocols established by operation of law, under IRC Section 7122. However, most IRS Offer Examiners (former Revenue Officers) use the Internal Revenue Manual (IRM) as their guide.


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FLAT FEE TAX SERVICE guarantees to have an IRS Wage Levy / IRS Garnishment stopped and released in 1 day/24 hours. Stopping an IRS levy is only the 1st step in tax relief. See if you are eligible and qualified for an IRS Offer in Compromise. Have your unfiled tax returns prepared and filed. Reduce your penalties and interest through a Penalty Abatement.
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