Tax Relief AnswersCurrently Not Collectible vs Partial Payment Plan
The short answer
Currently Not Collectible (CNC) status means the IRS has temporarily suspended most collection because you cannot pay due to financial hardship, and you make no monthly payment. A partial payment installment agreement (PPIA) is a payment plan with a monthly payment that will not pay the full balance before the collection deadline (the CSED). Under both, you still owe the full amount, penalties and interest keep growing, and the IRS can review your finances again. Sources: IRS, Temporarily delay the collection process and the Form 9465 instructions, checked November 2026.
How do CNC and a partial payment plan compare?
| Question | Currently Not Collectible | Partial payment installment agreement |
|---|---|---|
| Monthly payment | None | Yes, an amount based on your finances |
| Does the debt go away? | No; the IRS says it "is not forgiven or cancelled" | No; whatever is unpaid at the collection deadline is no longer collectible |
| Financial information | The IRS may ask for Form 433-F, 433-A or 433-B and documents showing income, monthly living expenses, bank accounts and property | You must complete a financial statement and provide supporting financial information |
| Collection activity | Most collection activities are suspended | The IRS generally does not take enforced collection while a plan is in effect |
| Federal tax lien | The IRS may file a Notice of Federal Tax Lien | A Notice of Federal Tax Lien may be filed to protect the government's interest until you pay in full |
| Refunds | Applied to your tax debt | Applied to your tax debt until it is paid in full |
| Penalties and interest | Continue to accrue | Continue to accrue; if you filed on time as an individual, the failure-to-pay penalty drops to 0.25% per month during an approved plan |
| How long it lasts | No fixed period | Until the balance is paid or the collection deadline arrives, if you keep the terms |
| Later reviews | The IRS may review your finances and resume collection if your ability to pay improves | The plan is subject to future reviews, which may lower, raise or leave the payment unchanged |
| Setup cost | None listed by the IRS | Installment agreement setup fees on the IRS payment plans page |
| How to ask | Call 800-829-1040 or the number on your notice | By phone, or Form 9465 with a financial statement |
The penalty rate is from the IRS failure to pay penalty page. The law behind partial plans is 26 U.S.C. 6159, which allows installment agreements that "facilitate full or partial collection" of a tax.
What about the 10-year collection clock?
The IRS generally has 10 years from assessment to collect, per its page Time IRS can collect tax. That page lists the events that pause or extend the clock, such as a pending payment plan request, a pending Offer in Compromise or a bankruptcy. Neither CNC status nor an approved payment plan is on that list. Asking for a plan does pause the clock while the request is pending. More: the 10-year collection limit.
When does each one tend to apply?
CNC tends to apply when the IRS's review of income and necessary living expenses shows nothing left over to pay each month. A partial payment plan tends to apply when there is some monthly amount available, but not enough to pay the balance before the collection deadline. In both cases the IRS also looks at assets. If the numbers change, either arrangement can change: a CNC account can be returned to collection, and a partial plan payment can be adjusted. Details: Currently Not Collectible and partial payment installment agreement.
FAQ
Do I make payments while my account is Currently Not Collectible?
No monthly payment is required, but the IRS applies any federal tax refund to the debt, and penalties and interest keep accruing.
Does a partial payment plan reduce what I owe?
No. You owe the full balance; the plan only sets a monthly payment, and the unpaid part becomes uncollectible only when the collection deadline passes.
Can the IRS file a lien under either option?
Yes. The IRS says it may file a Notice of Federal Tax Lien during CNC status, and the Form 9465 instructions say a lien notice may be filed with a payment plan until you pay in full.
Can the IRS change a partial payment plan later?
Yes. The Form 9465 instructions say a partial plan is subject to future reviews, and a new financial statement may lower, raise or keep the monthly payment.
Which one fits my situation?
It depends on the facts of your case; a credentialed professional (enrolled agent, CPA or attorney) or the Taxpayer Advocate Service can look at yours.