Currently Not Collectible Status — MD, DC & VA

Currently Not Collectible (CNC) — also called hardship status — is a formal IRS status that halts all collection activity. No levies, no garnishments, no seizures. It's available when your income is below your allowable living expenses and you genuinely cannot afford to pay anything toward your tax debt.

CNC status is not a permanent resolution. The IRS reviews hardship cases annually. If your financial situation improves, collection can resume. The debt also continues to accrue interest and some penalties. However, CNC status can be a valuable component of a longer-term strategy — particularly when combined with letting the 10-year Collection Statute Expiration Date (CSED) run out.

The CSED strategy: The IRS has 10 years from the date of assessment to collect a tax debt. If you can maintain CNC status (or another non-collecting resolution like an installment agreement) until the statute expires, the remaining balance is extinguished. This isn't a guaranteed outcome — it requires careful management — but it's a legitimate legal strategy that eliminates tax debt without payment.

How CNC is established:

• You provide a Collection Information Statement (Form 433-A or 433-F) documenting income, expenses, and assets
• The IRS evaluates whether your income minus IRS allowable expenses leaves any ability to pay
• If nothing is available, CNC status is granted

State CNC equivalents: Maryland and Virginia have their own hardship or deferral programs for taxpayers who cannot pay. We address state and federal situations simultaneously.