Currently Not Collectible: When You Can't Pay Anything
Some people genuinely cannot pay the IRS. If your income barely covers basic living expenses, the IRS can place your account in Currently Not Collectible status. They stop all collection activity. No levies. No garnishments. Nothing.
How CNC Works
The IRS reviews your finances and determines that collecting from you would create economic hardship. They shelve your account. The debt doesn't go away, but they stop trying to collect it. Meanwhile, the 10-year collection statute keeps running.
The Strategic Angle
If you're placed in CNC status at year 7 of the collection statute, the IRS only has 3 years left to collect. If your financial situation doesn't change, the debt expires. This isn't avoiding your obligation. It's the law working as designed.
Financial Disclosure
To qualify, you submit Form 433-A (individuals) or 433-B (businesses) with supporting documentation. The IRS has specific allowable expense standards. I know what those standards are and how to present your finances to maximize your case.
Annual Reviews
The IRS may review your CNC status periodically. If your income increases significantly, they can resume collection. I prepare clients for this possibility and monitor the situation.