How to Achieve Back Taxes Relief under Currently Not Collectible

Last updated on June 19, 2023

Taxpayers can achieve back taxes relief using Currently Not Collectible even if they cannot pay any amount of their back taxes. Under this agreement, the IRS judges the financial capacity of the taxpayer to see how much amount of tax debt can be paid by the taxpayer. If the IRS finds that the payment of any amount will push the taxpayer into a financial crisis, then the IRS puts the tax debt case under the status of Currently Not Collectible (CNC).

Under CNC, the IRS stops all collection actions and waits for the financial condition of the taxpayer to improve. Collection efforts are only initiated if the IRS sees an improvement in the financial condition. If not, the IRS has 10 years to collect the tax debt.

Currently Not Collectible helps taxpayers to avoid or stop IRS collection actions while gaining more time to pay their tax debt. Taxpayers that have the financial strength only to meet basic living needs can qualify for CNC. For tax debt reduction and payment of tax debt in installments, taxpayers may use payment plans such as Offer in Compromise and Installment Agreements.

Seeking early resolution of tax debt is important even if taxpayers have partial or no ability to pay their tax debt. It not only helps them to avoid collection actions by the IRS, but also pay less in tax debt.