Tax Relief AnswersIRS Hardship Status (Currently Not Collectible)
The short answer
If paying your tax debt would leave you unable to cover basic living expenses, the IRS can mark your account Currently Not Collectible (CNC), which the IRS describes as a temporary delay of the collection process. Levies and payment demands stop, but the IRS says plainly that the debt "is not forgiven or cancelled": penalties and interest keep accruing, refunds are applied to the balance, and the IRS may file a lien and recheck your finances later. The IRS explains the status on its temporarily delay the collection process page. The IRS does not publish how many accounts are in CNC each year.
What CNC does and does not do
| Question | What the IRS page says |
|---|---|
| Does collection stop? | Yes, most collection activities are suspended while the status lasts |
| Is the debt forgiven? | No, you still owe the full amount |
| Do penalties and interest stop? | No, both accrue until the balance is paid in full |
| Will I get my refund? | No, a federal refund is applied to the unpaid debt |
| Can the IRS still file a lien? | Yes, it may file a Notice of Federal Tax Lien to protect its interest |
| How long does it last? | No fixed period; the IRS may review your finances periodically and resume collection if your ability to pay improves |
| What do I have to show? | Income, monthly living expenses, bank accounts and property, usually on Form 433-F, 433-A or 433-B |
One point the IRS page does not state but its collection period page makes clear by omission: CNC is not on the list of events that pause the 10-year collection period. The clock keeps running while you are in CNC. See the 10-year limit.
Steps
- Gather proof of income (pay stubs, benefit letters), your monthly expenses (rent, utilities, food, medical, transportation, insurance) and statements for every bank account, vehicle and property.
- Fill in the Collection Information Statement the IRS asks for: Form 433-F for most individuals, Form 433-A if the IRS requests it, Form 433-B for a business.
- Call the number on your most recent notice, or 800-829-1040, and ask for your account to be placed in Currently Not Collectible status because paying would create a hardship.
- Send the documents the IRS asks for within the time it gives you. An incomplete statement is the usual reason a request stalls.
- Keep filing every return on time and keep withholding or estimated payments current. A new balance can bring the account back into active collection.
- Keep your copies. When the IRS reviews your situation later, you will need to show whether anything changed.
Common mistakes
- Treating CNC as a settlement. It is a pause. The balance, plus interest at 7% per year as of October 2026 and the failure-to-pay penalty, is still there when the pause ends or when the IRS reviews your income.
- Leaving an asset off the statement. The IRS verifies accounts and property; an omission can end the status and damage any later request.
- Expecting the lien to go away. A lien notice can be filed while you are in CNC, and it stays until the debt is paid, expires or is otherwise resolved.
- Stopping filing. CNC covers past balances only; unfiled years are handled separately and can produce new assessments.
- Ignoring the collection clock. For a balance near the end of the 10-year period, a correctly placed CNC lets the period expire; for a young balance, the IRS has years to revisit your income.
CNC is requested with a form and a phone call, and a Low Income Taxpayer Clinic can make that request with you for free or for a small fee if your income qualifies. If you can afford some payment but not the full balance, the IRS may offer a partial payment installment agreement instead; if your finances will not improve, an Offer in Compromise may be worth checking with the IRS Pre-Qualifier.
FAQ
What does Currently Not Collectible mean?
It means the IRS has agreed to temporarily delay collection because your financial condition does not allow payment. The debt remains, with penalties and interest, and the IRS may review your situation later and resume collection.
Does the 10-year collection period keep running while I am in CNC?
Yes. The IRS's list of events that suspend the collection period does not include CNC status, so the period continues to run and the balance can expire while the account is in that status.
Will the IRS take my tax refund while I am Currently Not Collectible?
Yes. The IRS page says a federal tax refund is applied to the unpaid debt.
How do I ask for CNC status?
Call the number on your notice or 800-829-1040, state that paying would create a hardship, and be ready to complete Form 433-F (or 433-A or 433-B) with proof of income, expenses and assets.