Tax Relief Counsel:

Currently Not Collectible (CNC) Status

Are you seeking relief from IRS collections? Our experienced tax attorney helps with currently-not-collectible (CNC) status in Washington, D.C., and nationwide, offering reliable assistance to protect your finances.

Trusted Tax Attorney for CNC Status in Washington, D.C.

Currently-not-collectible status is a critical relief option for taxpayers facing financial hardship.

At Tax Relief Counsel, we understand the challenges you face when dealing with tax issues, and we’re here to help. Our trusted tax attorney in D.C. regularly helps clients attain CNC status, offering crucial assistance to individuals and businesses across the U.S.

Our tax relief attorney can provide a free case review to assess your situation and offer guidance on the best path forward. Your financial well-being matters to us, and we’re committed to finding solutions that work for you.

What Is Currently-Not-Collectible (CNC) status?

Currently-not-collectible status, often referred to as “hardship status” or “status 53,” is a temporary relief option provided by the Internal Revenue Service (IRS) for taxpayers who can’t afford to pay their outstanding tax debts.

When a taxpayer is granted CNC status, it means the IRS recognizes their inability to make payments without causing severe financial hardship.

What Happens Once I’m Granted CNC Status?

If the IRS approves your request for CNC status, the following conditions will apply.

The IRS’s Collection Efforts Will Cease

The IRS typically stops all collection activities against taxpayers with CNC status, including wage garnishments, bank levies, and property seizures. That said, it’s important to note that CNC status isn’t a forgiveness of your tax debt.

You’ll Get Temporary Relief

To reiterate, CNC status isn’t a permanent solution but rather a temporary reprieve from collection pressure from the IRS. It allows you some breathing room to improve your financial situation.

You’ll Continue Accruing Interest and Penalties

Even with CNC status, interest and penalties will continue to accrue on your unpaid tax debt. However, the IRS won’t actively pursue collection during this time.

You’ll Be Subjected to Periodic Reviews

The IRS may conduct periodic reviews to assess whether your financial situation has improved. If it has, the agency may revoke your CNC status and resume its collection efforts.

You’ll Still Be Required to File a Tax Return

Taxpayers are still required to file tax returns while possessing CNC status, even if they can’t afford to pay the tax liabilities. As such, it’s crucial to stay on top of your tax documentation and heed the relevant deadlines.

Who Is Eligible for CNC Status?

The IRS determines eligibility for currently-not-collectible status based on an individual’s financial circumstances. To qualify for CNC status, the taxpayer must meet specific criteria, which include:

Financial Hardship

The taxpayer must demonstrate that paying the outstanding tax debt would result in significant financial hardship. This could be due to unemployment, a severe medical condition, a disability, or other circumstances that render them unable to meet basic living expenses while covering their tax liability.

Limited Assets

The taxpayer’s assets and income must be at a level where there’s not enough for them to cover both essential living expenses and their tax debt. The IRS will assess the individual’s ability to pay by comparing their income and assets to allowable living expenses, which are based on national and local standards.

Temporary Situation

The IRS typically grants CNC status when the financial hardship is expected to be temporary. If the taxpayer’s financial situation is likely to improve in the near future, the agency may grant CNC status until their circumstances change.

Compliance with Tax Filings

The taxpayer must be current with all required tax filings. This means they must have filed all required tax returns up to the time of their petition.

No Fraud or Willful Evasion

CNC status isn’t generally extended to taxpayers who engage in fraud or willful tax evasion. If the IRS determines that the taxpayer’s failure to pay taxes was intentional, they likely won’t qualify for CNC status.

It’s worth emphasizing that CNC status isn’t a one-size-fits-all solution, and eligibility can vary based on individual circumstances.

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Our experienced tax relief lawyer can help you overcome your looming tax challenges. Contact us today to schedule a free case review and take the first step toward regaining control of your finances.

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Why You Need an Attorney for CNC Status

Obtaining currently-not-collectible status is a somewhat complicated process, one that requires petitioners to meet specific criteria set by the IRS. Here are a few reasons why having an attorney is essential:

Procedural Complexity: Our proven tax attorney has a deep understanding of tax laws and IRS regulations and can help you navigate them effectively.
IRS Experience: Our team has ample experience dealing with the IRS, negotiating with tax authorities, and interpreting their processes and expectations for clients.
Legal Protection: An attorney can protect your rights throughout the application process, ensuring that you’re treated fairly by tax collection authorities.
Comprehensive Approach: We can assess your overall tax situation and formulate a comprehensive strategy that promotes your long-term financial well-being.
Improved Chances of Success: Having an attorney greatly increases your chances of successfully obtaining CNC status and provides peace of mind during a challenging time.

Having the qualified tax law professionals at Tax Relief Counsel by your side can make all the difference when it comes to achieving a favorable outcome for your case.

How Our Tax Attorney Can Help You

Here are a few more specific ways attorney Ramy Shabana, knowledgeable tax attorney and founder of Tax Relief Counsel, can assist you.

Thorough Case Evaluation
Ramy will start by conducting a comprehensive review of your financial situation, income, expenses, and tax debt. This evaluation will be crucial for determining your eligibility for CNC status and presenting a strong case to the IRS.
Skilled Negotiation
Ramy will also negotiate directly with the IRS on your behalf. He’s intimately familiar with IRS procedures and the nuances of CNC status, allowing him to advocate for your interests effectively.
Precise Documentation
Securing CNC status requires meticulous financial documentation. Our team will help you gather and organize the necessary financial records to support your case, ensuring that all required information is accurate and complete.
Managed Communication
Your attorney will serve as your intermediary with the IRS, handling all formal communications, inquiries, and negotiations. This will alleviate the stress of dealing directly with the IRS and guarantee that your rights remain protected.

Why Choose
Tax Relief Counsel?

Tax Relief Counsel offers a unique set of benefits to clients facing seemingly insurmountable tax-related challenges.

Comprehensive Tax-Relief Services

We provide a wide range of tax-relief services, including assistance with currently-not-collectible status. Whatever your situation may be, we have the knowledge and skill to resolve it effectively.

Worldwide Representation

We proudly offer our services to clients not just across the United States but throughout the world.

Free Case Review

We’ll start with a free case review to assess your financial circumstances and provide initial insight. This review will help you better understand your options without any initial financial commitment.

Flat-Fee Approach

We offer competitive pricing with a flat-fee, full-service model. You'll always know upfront what to expect and never face any unexpected costs or unwelcome surprises.

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FAQs

Is CNC status permanent?

No. It’s designed to serve as temporary relief to help taxpayers avoid undue financial hardship. The IRS will periodically review your financial situation to determine whether you still qualify. If your circumstances improve, the agency may revoke your CNC status and resume its collection efforts.

What if my financial situation improves while in CNC status?

It’s vital to promptly notify the IRS of any changes to your financial situation while you have CNC status. Failure to do so could result in the revocation of your CNC status, a resumption of collection activities, and/or financial penalties.

Are there any tax debts that can’t be placed in CNC status?

While CNC status covers many types of tax debts, certain obligations may not be eligible for relief. For example, tax debts associated with fraud or willful tax evasion are less likely to qualify for CNC status.

Additionally, some federal tax liabilities, such as employment tax obligations, have specific rules governing CNC eligibility. Consult a tax attorney to determine whether your tax debts will be affected by CNC status.

What if i don’t qualify for cnc status? what are alternatives to cnc status for resolving tax debt issues?

There are several alternatives to CNC status for resolving tax debt issues, including:

Installment Agreements: You can negotiate a monthly payment plan with the IRS to pay off your tax debt over time
Offers in Compromise (OIC): An offer in compromise allows you to settle your tax debt for less than the full amount if you meet certain eligibility criteria
Partial Payment Installment Agreements: These are similar to standard installment agreements but involve smaller monthly payments based on your ability to pay
Bankruptcy: In some cases, bankruptcy may provide relief from certain tax debts, although specific rules apply

Your tax attorney can describe these options to you in more detail and help determine which would be most appropriate for your situation.

How long does it take to secure cnc status with legal assistance?

The timeline for obtaining CNC status can vary depending on the complexity of your financial situation and the IRS’s responsiveness.

Generally, the process involves gathering and submitting financial documentation, negotiating with the IRS, and waiting for a determination, which can take several months. Seeking legal assistance can help condense this timeline and ensure that your application is handled correctly to increase your chances of approval.

What are the key irs notices and forms taxpayers may encounter when applying for CNC Status?

You might receive one or more of the following forms while seeking CNC status.

CP14 or CP501 — Initial Contact Letter or Notice

These notices are used to indicate that you have an outstanding tax debt. They represent the initial communication from the IRS regarding your tax liability.

Form 433-F, Collection Information Statement

Form 433-F is a critical component of the CNC application process. It helps the IRS assess your eligibility for CNC status by gathering detailed information about your finances, including your income, expenses, assets, and liabilities.

Notice of CNC Status

This notice serves to inform you that your account has been placed in currently-not-collectible status. It confirms that the IRS has temporarily suspended its collection activities due to your financial situation.

CP71C Notice — Annual Statement

While in CNC status, you may receive an annual statement (CP71C) from the IRS. This statement provides information about your tax debt, including the outstanding balance, any accrued interest and penalties, and the status of your CNC account.

Have Questions?
Arrange a No-Cost Consultation Today!

If you need professional guidance regarding your tax situation, don’t hesitate to reach out to Tax Relief Counsel for a free case review. Our experienced tax attorney is prepared to analyze your financial circumstances and help you find a way forward.