Non-Collectible Status

Currently Non-Collectible status is a status, knows a Code 53 to the IRS in which the IRS does not engage in enforced collections like bank and wage levies.

Sometimes the IRS codes cases Currently Non-Collectible(CNC) because they can't find the tax payer, or the tax payer isdecieased and is lkly to have not assets to attach. Otherwise taxpayers request Currently non-collectible status becuase of a financial hardship.

A prime benefit of CNC aside from the fact that IRS won't levy your income or assets, is that the staute of limitation of tax tebts (CSED continues to run).

Three main drawbacks:

  • CNC can be only tempoary. the IRS may start looking for money when your situation improves, especially as you get closer to the CSED.
  • The IRS will likely file a Notice of Federal Tax Lien if they have not done so yet.
  • The IRS is legally entitled to take your refunds. This can be particularly hamrful for low income taxpayers with Earned Income Credit (EIC).