Placing your IRS Account on "Currently Not Collectible Status"
Currently Not Collectible Status "CNC"
Sometimes, you have no legitimate means of paying back any of your back taxes. You are permanently disabled, unemployed, underemployed, or ill, and your limited income is barely enough to meet your expenses. Further, you have no assets that you can sell in order to pay your taxes. In this case, the IRS can put you on "currently not collectible" status. If the IRS puts you on CNC status, it will suspend all collection efforts during the period of time that you are not collectible. Carl Rothrock is a tax attorney in Dallas/Fort Worth. Part of his practice includes placing accounts on currently not collectible status.
Requirements for being placed on Currently Not Collectible Status
- You must submit a financial affidavit, Form 433F or 433A to the IRS every year while your account is placed on currently not collectible status. The affidavit requires you to disclose all your income, expenses, and assets. The IRS will match the information you provide in this form with your tax return on file to verify the amounts. If you fail to submit the form every year, your account will be taken off uncollectible staus, and the IRS can resume collection efforts. 2. While you are on uncollectible status, the IRS will place a tax lien on you. If your finances change or if you acquire property, the IRS can change your status and force you to sell your property. 3. You must file all your tax returns. If you do not file a return after being placed on uncollectible status, you will be taken off uncollectible status, and the IRS can resume its collection efforts. If you have a new tax liability after being placed on CNC status, the IRS can take you off CNC status. 4. The statute of limitations is not tolled while you are on CNC status. Therefore, if your financial hardship is permanent, the statute of limitations should run in ten years, and the debt will eventually become uncollectible. Visit our IRS statute of limitations page on the Rothrock Law Firm website to see various exceptions to the statute of limitations. ## How to Declare CNC status In order to have the IRS put you on CNC status, you must submit a financial affidavit Form 433F or 433A with your application. We don't recommend filling this out on your own. If you fill it out incorrectly, your application could be denied. The IRS limits the amount of expenses you can claim on this form. It's not recommended to handle IRS problems on your own. To hire a tax attorney in Dallas today, call the Rothrock Law Firm at (214) 432-5780.