Currently Not Collectible Taxes

Also referred to as “CNC” or “transaction code 305,” Currently Not Collectible status is a term used by a tax authority such as the IRS to designate a taxpayer as unable to pay his or her tax debts. If the IRS receives legitimate and specific evidence that the taxpayer has no ability to pay, it may designate that taxpayer as Currently Not Collectible, and will accordingly cease all collection activities against the taxpayer, including terminating levies and garnishments.

Taxpayers may “request” Currently Not Collectible status by submitting IRS form 433-F, Collection Information Statement, to an IRS officer or through the IRS Automated Collection System Unit.

If a taxpayer qualifies for Currently Not Collectible status, he or she continues to owe the IRS the original tax debt and interest will continue to accrue on the principal amount. Despite this, all collection activities will cease while the IRS continues to monitor the taxpayer’s financial situation to see if it improves to a point where payment can be demanded, in a review process that typically happens annually. The taxpayer is annually required to submit an updated financial statement to the IRS for review – this annual statement needs to be meticulously accurate since the IRS will compare it to previously filed tax returns to ensure the statements appropriately correspond.

It is important for those with Currently Not Collectible status to keep in mind that the statute of limitations is still running for the outstanding tax debt. Once the ten year statute of limitations has passed the IRS can no longer collect tax debts, with some important exceptions.

Acquiring Currently Not Collectible status may be a viable option for certain taxpayers. The tax attorneys at Yesner & Boss, P.L. have the experience and knowledge required to assist taxpayers needing tax relief assistance. Serving Tampa, St. Petersburg, Clearwater, Sarasota, New Tampa, and areas throughout Florida, Yesner & Boss, P.L. is prepared to meet concerned taxpayers for a consultation to discuss the possibility of attaining Currently Not Collectible status.