Difference Between Currently Not Collectible and an IRS Offer in Compromise - IRS Tax Attorney

IRS Currently Not Collectible Status. What is it? Will it help?

IRS Currently Not Collectible Status can help keep IRS out of your pay check, out of your bank accounts and out of your life.

Although IRS Currently Not Collectible Status can be a great deal, being Currently Not Collectible is not as great as an IRS settlement through the Offer in Compromise program. More on that later.

You could be one of the fortunate few who get it. And it’s not easy to do. Government employees of IRS perform extensive research to determine your monthly income and expenses (see details below). 

IRS agents make their final determination after completion of their exhausting financial investigation of your IRS Uncollectible Status request. A representative of IRS Automated Collection Service (ACS) then specifies if you are unable to pay any of your unpaid taxes. If so, your income tax account can be classified as IRS Currently Non Collectible Status. Accounts that are approved for IRS Non Collectible Status will then be temporarily suspended from any future IRS collection action. Once classified as uncollectible you will not have to make any payments to IRS on your previous unpaid income taxes.

With IRS Currently Non Collectible Status do my unpaid income taxes go away?

Unpaid income taxes do not disappear with IRS Currently Not Collectible Status. IRS does not forgive prior year unpaid taxes. We help classify your unpaid income taxes to be put “on hold.” IRS will want to re-evaluate your financial status at some point in the future. A new financial investigation will be conducted all over again at that time.

How long does IRS Currently Not Collectible Status last?

Unpaid income taxes that are placed into IRS Currently Not Collectible Status can last from six months to several years. The IRS computer will mail annual balance due notices to you. Income increases, automobile note payoffs, and rent or mortgage decreases are factors that may affect your status.

Invariably, it is almost impossible to estimate how long your IRS Currently Not Collectible Status will last. Most federal income tax negotiating experts like us have seen IRS Uncollectible Status arrangements last from one to five or more years. These are important factors to understand, indeed, so that you may maintain your status are discussed on this page.

IRS Currently Not Collectible Status advantages.

Numerous advantages exist regarding IRS Currently Not Collectible Status. Unfortunately, taxpayers are confused because they are not prepared. Once successful in your negotiation you will not be required to make monthly payments on your old taxes. 

Agents of the IRS will not knock on your door and petrify you if your account is classified as IRS Currently Non Collectible. Federal agents making embarrassing appearances with badges at your workplace will not occur during your IRS Uncollectible Status term. Bank accounts will remain safe for you. You will not lose your automobiles to IRS seizure.

What questions will they ask for IRS Uncollectible Status?

Without exception IRS requires monthly income and expense verification to approve IRS Currently Not Collectible Status. Candidates for IRS Not Collectible Status must provide several months of pay stubs. Along with the pay stubs, all deductions on your pay stubs must be explanation in detail. You must give three months of bank statements. Rent/mortgage payments must be provided with check copies.

As the applicant, you must provide IRS copies of three months of utility payments with copies of the utility bills. IRS must see copies of car notes. You must give a list of all of your self-employed business accounts receivable because that serves as a source of cash for the IRS. Government managers and reviewers obtain statements from brokerage accounts. Copies of all credit card statements add to the list of requirements. All in all every bit of this trouble could definitely be worth it for IRS Currently Non Collectible Status classification.

IRS Currently Not Collectible Status – What you must do to stay in this status.

You remain in IRS Currently Not Collectible Status only by following all the rules. You default your CNC status by failure to meet specific requirements. One minor mistake can ruin your negotiation so please be cautious. Your must file your tax returns in a timely manner while you are in IRS Uncollectible Status. You must also pay all of your future taxes. An applicant’s failure to respond to periodic IRS requests may also result in loss of status.

What is the difference between IRS Non Collectible Status and an IRS Installment Agreement?

An IRS Installment Agreement allows you to establish an affordable monthly payment that will resolve the tax debt over a long time. IRS Non Collectible Status freezes the tax debt for a period of time to allow you to get into a better financial position so that payments can be made at a later point in time to resolve the tax debt. Unfortunately, the tax debt will continue to accrue interest during the IRS Installment Agreement period, so at the end of the non collectible status you will owe more than you did when your account was originally classified as IRS non collectible status.

What is the difference between IRS Non Collectible Status and an IRS Offer In Compromise?

The Difference Between Being Currently Not Collectible and An Offer in Compromise.

When you are Currently Not Collectible, yes, you will not make any payments on your income tax debt. You will have a Federal Tax lien filed against you. If your credit stinks, this will have little to no effect on you. If you have good credit, kiss it good-bye. 

With a successful Offer in Compromise, you will pay the IRS a very small amount in settlement of your income tax debt and there is no Federal Tax Lien. You get a Fresh Start.

We like to make the following analogy: Imagine you are running a marathon race and 200 yards from the finish line you decide to quit the race. That the difference in being Currently Not Collectible and doing an Offer in Compromise.

IRS Settlement Success


It’s important to remember that if you have IRS Non Collectible Status that the IRS will treat you very differently than if you have filed IRS an Offer In Compromise, which will wipe away all of your income tax debt. IRS requires the same financial information during the application process as an IRS Offer In Compromise, but IRS Currently Not Collectible Status status will reflect and prove your only inability to pay even a small monthly payment.

What about IRS penalties and interest during IRS Currently Not Collectible Status?

Your interest and penalties accrue steadily regardless of your attempts to slow them down while in IRS Uncollectible Status. However, you should not explode because IRS penalty rates are significantly lower than virtually all banks and definitely lower than credit cards. Your IRS Currently Non Collectible Status provides a safety net for you and also for your family.

A few words of warning regarding IRS Currently Not Collectible Status.



First of all, your attempts at negotiate your own IRS Currently Not Collectible Status for the very first time may prove to be exhausting. However, your hard work can be rewarding since along with your well-deserved success will come satisfaction. 

Additionally, prepared first-timers quickly learn to understand the formulas and calculations required by IRS. Regrettably, one or two slip ups or innocent mistakes can easily cost you thousands of dollars on your IRS Currently Not Collectible Status attempt. As a result, novices’ attempts are sometimes successful but are frequently extremely costly.