Currently Not Collectible (CNC): When the IRS Agrees You Can't Pay

Currently not collectible is the IRS formally agreeing that collecting from you right now would create economic hardship. Collection activity stops — no levies, no garnishments — while you’re in CNC.

What CNC does (and doesn’t do)

• ✅ Levies and garnishments stop. The IRS leaves your paycheck and bank account alone.
• ✅ The 10-year collection statute keeps running. People do occasionally ride CNC to the statute’s expiration — the debt legally evaporates.
• ❌ The debt doesn’t go away. Interest and penalties keep accruing.
• ❌ The IRS can (and does) still take future refunds.
• ❌ A lien may still be filed — CNC is not lien protection.

How you get it

Prove inability to pay with a Form 433-A or 433-F financial statement showing monthly income doesn’t cover allowable living expenses under IRS Collection Financial Standards. Key points:

• “Allowable” is their number, not yours — the IRS caps housing, transport, and food by county/national standards
• Equity in assets counts against you — home equity and retirement accounts can disqualify you
• CNC gets reviewed periodically; if your income rises, status can be revoked

CNC vs. OIC — pick the right tool

CNC keeps the debt alive; an offer in compromise kills it. If you have some assets or earning power, OIC is the better long-term play. If you’re on fixed income with no real assets — Social Security, disability, minimal work — CNC is often the endgame, and it costs nothing but paperwork. Any firm quoting you thousands to file a 433-F for a straightforward hardship case is overcharging.

Related: Offer in compromise · Unfiled returns · Check your options