Halting the Levy: Obtaining Currently Not Collectible Hardship Relief
What is IRS Currently Not Collectible (CNC) Status?
Currently Not Collectible (CNC) status is an official IRS hardship designation under Policy Statement 5-71. When granted, the IRS temporarily halts all aggressive collection enforcement—including bank levies, wage garnishments, and Revenue Officer calls. You qualify if your allowable living expenses (housing, medical, food) match or exceed your monthly income. While interest and penalties continue to accrue, the crucial 10-year Collection Statute Expiration Date (CSED) clock keeps running. If the 10-year limit expires while in CNC status, the underlying tax debt is legally written off.
When your basic living expenses consume every dollar of your income, receiving an aggressive collection letter from the IRS can trigger intense anxiety. Many taxpayers make the mistake of agreeing to a monthly payment plan they cannot afford simply to stop the harassing phone calls.
If paying the IRS means you cannot afford rent in Henrico County, groceries, or necessary prescriptions, the federal government cannot legally force you into a payment plan. You may qualify for Currently Not Collectible (CNC) status.
How CNC Status Protects Your Household
Getting placed into CNC status does not erase the tax balance overnight, but it acts as an immediate pause button on federal collection enforcement:
- Halts Active Seizures: The IRS immediately stops new bank levies, paycheck garnishments, and asset seizures.
- Keeps the 10-Year Clock Ticking: The statutory 10-year collection clock (CSED) does not stop running while you are in CNC hardship status. If your financial hardship persists until the 10-year limit expires, the IRS must write off the remaining tax balance permanently.
- Passport Protection: Unlike active tax delinquencies, an account categorized under CNC hardship is exempt from passport revocation certification.
Important Realities of Hardship Status:
- Tax Refund Offsets: While CNC halts active levies, the IRS will still intercept future federal or state tax refunds and apply them to your balance.
- Federal Tax Liens: CNC status stops enforced collection, but the IRS retains the right to file or maintain a Notice of Federal Tax Lien (NFTL) to secure its debt until the statutory clock runs out.
Qualifying for Hardship Status in Central Virginia
To secure CNC status, you must submit a detailed financial statement—typically Form 433-F or Form 433-A—proving that your income is equal to or less than allowable local living standards.
Our Richmond practitioners measure your income and living costs against local IRS allowances to mathematically prove you have zero disposable income remaining. We will walk you through the entire process and help you construct a better financial future.
Give us a call today or contact us to take your first steps.