The IRS Currently Not Collectible Program (“CNC”) may be your answer if you owe the IRS for back taxes, and you can’t make a monthly payment? In other words, this is the IRS hardship program for taxpayers who are currently having severe financial problems.
The IRS will require the taxpayer to disclose all of their financial details, such as monthly income and expenses as well as assets and debts. If you are approved for CNC, then you will still owe your tax debts, but the IRS will suspend enforced collections against you. At the most, the IRS will file a protective Federal Tax Lien, however it will not engage in any wage garnishments or bank levies or asset seizures.
Generally, the IRS will keep taxpayers in CNC for about 18 months at a time. At that point, the IRS will send out notices to the taxpayer to once again submit their financial records to determine whether CNC can be extended for an additional 18 months.
One big benefit of CNC is that, much like a traditional IRS Installment Agreement, the Collections Statute Expiration Date will not be stopped. Yes, I have one client who owes about $18,000 in IRS debt and due to his considerable and permanent health problems, he will never be able to work again. As a result, I was able to get him into CNC and eventually, his tax debts will simply go away.
Again, much like a Partial-Pay Installment Agreement, a CNC application can be beneficial due to the fact that it doesn’t “stop the IRS clock”.