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Do you qualify for CNC status with the IRS?

On Behalf of | Jan 23, 2019 | Tax Debt

You may be facing financial circumstances that prevent you from paying the amount of tax you owe to the Internal Revenue Service.

You are looking for some kind of relief, and “Currently Not Collectible” status may be just what the doctor ordered.

A little history

The IRS has the authority to determine whether some accounts are eligible for Currently Not Collectible, or CNC, status. Before proceeding, the agency must weigh the potential for collection against the associated costs as well as its ability to make the collection. Revenue Officers, as well as Appeals and Settlement Officers, can advise the IRS of accounts that are currently not collectible. Reports for the CNC accounts and their dollar amounts can occur on either a monthly or quarterly basis.

Qualifying for CNC status

In addition to individuals seeking tax relief, small businesses that have closed and corporations that have had a liquidating bankruptcy may be eligible for CNC status. Sometimes the IRS will provide this status to accounts of people they are unable to locate. CNC status also extends to people who have died or to their estates. A member of the military who is in a combat zone may be eligible, as well as an American who resides in another country.

The collection process

Once the Internal Revenue Service clears you for CNC status, it will send letters from time to time that serve to remind you of your debt. The IRS may also request that you provide periodic, updated financial statements to determine whether your circumstances have changed and if you are able to pay your tax obligation. You can expect this kind of interest in your financial condition to continue until you either declare bankruptcy or the 10-year mark arises. The IRS cannot collect on the debt you owe after a period of 10 years has elapsed. Now might be the time for you to explore next steps from a legal point of view if you believe you qualify for CNC status.