OMG Tax can help you obtain CNC status if you meet the criteria set forth by the IRS. If you have unfiled tax returns, OMG Tax can prepare and file your tax returns to enable the possibility to obtain CNC status.
Understanding the Currently Not Collectible Status
Currently Not Collectible (CNC) status is a code that the IRS can attach to your tax account to halt collection activities against you. Obtaining CNC status is a temporary relief for you from garnishments, levies and property seizures. Interest and penalties continue to accrue even with CNC status. Therefore, it is important to keep in mind that CNC status does not eliminate your tax liability, rather it is temporary relief from IRS collection efforts against you.
Who is eligible for CNC status?
Any individual, sole proprietor, or single-member LLC is eligible to be placed into CNC status. The IRS must agree that you do not have sufficient income to make monthly tax payments to the IRS. Any missing tax returns must be prepared and filed. Additionally, if you do not have enough income tax withheld from your paycheck, you will be required to fix that deficiency.
What is required to obtain CNC status?
You need to be able to prove to the IRS that making monthly payments on your tax debt would create an economic hardship. In other words, the IRS must agree that by enforcing collection activities against you would prevent you from meeting your minimum monthly expenses.
How long does CNC status last?
Typically, CNC status will remain in effect for one to two years and can be renewed indefinitely. However, there are a number of reasons why CNC status will be removed.
- The IRS input an expiration date on your CNC status.
- Your income significantly improves.
- You fail to file tax returns in the future.
- You owe new taxes after filing your tax return.
Statute of limitations
There is a 10-year statute of limitations on tax debt collections. While in CNC status, the 10-year statute of limitations on tax debt collection is still running. If the IRS cannot collect the tax within the 10-year statutory period, then the tax debts will expire.
Does obtaining CNC status eliminate your tax burden?
As mentioned previously on this page, CNC status is relief from enforced tax collection by the IRS. You may have other options to eliminate a tax debt such as entering into an affordable Installment Agreement with the IRS or getting accepted for an Offer in Compromise. If you have unfiled tax returns, simply filing those missing tax returns may eliminate your tax burden.
Contact OMG Tax today so we can discuss your situation and options.