What is the IRS Currently Not Collectible CNC Status?
Currently Not Collectible (CNC). In this status, most enforced collections are stopped (bank and wage levies). The balance due continues to accrue penalties and interest, but you are not required to make any fixed monthly payment. The IRS can declare a taxpayer “currently not collectible,” after the IRS receives evidence that a taxpayer has no ability to pay. Such evidence is usually obtained from the taxpayer on IRS Form 433-F, Collection Information Statement. A taxpayer can request “currently not collectible” status by submitting Form 433-F to an IRS Revenue Officer or the IRS Automated Collection System unit.
IRS Hardship Currently Not Collectible CNC Status Tax Debt
If this is applicable, call the IRS customer service at 1-800-829-0922 and speak with a representative. Let them know the facts and circumstances, and any payment would be considered a hardship. You may be asked to provide the same type of income/expense information you listed in your post. Assuming your request is accepted, you will receive a confirmation letter in about 2 to 3 weeks, and annual reminder notices after that. Make voluntary payments whenever you can, any amount at any time. Federal and state refunds will be offset to the balance due.
Always Pay Taxes while in Currently Not Collectible Status
If you are already in this status, stay there. Pay anything you can. Once the IRS declares a taxpayer currently not collectible, the IRS must stop all collection activities, including levies and garnishments. The IRS must send an annual statement to the taxpayer stating the amount of tax still owed. This annual statement is not a bill. While in not collectible status, the 10-year statute of limitations on tax debt collection is still running. If the IRS cannot collect the tax within the 10-year statutory period, then the tax debts will expire.
Changing IRS Payment Status
When your other debts fall off or your income increases, and you can afford a monthly payment plan, give the Service a call and you can request an Installment Agreement for as little as $43 per month, based on a $3,000 assessed balance due. Come prepared for a long phone call. Be aware that CNC status is usually a temporary solution and not the pie in the sky tax relief. The tax is not forgiven or compromised, and interest and penalties continue to accrue.