IRS Tax Relief Guide

Currently Not Collectible: How IRS Hardship Status Works

By Ray Neu, Publisher | Last reviewed: October 25, 2026 | Reading time: 9 min

Short answer

Currently not collectible (CNC) status means the IRS has temporarily suspended most collection because paying would leave a taxpayer unable to meet reasonable basic living expenses (IRM 5.16.1.2.9). The IRS may ask for Form 433-F or Form 433-A and proof. The debt is not forgiven: penalties and interest keep accruing, refunds are applied, and a lien may be filed.

CNC is often called IRS hardship status. It has no fixed formula: it is a collection decision the IRS makes after reviewing income, living expenses and assets. This guide covers the hardship test, the expense standards effective June 29, 2026, what the status changes and what happens when finances improve.

Deadline to know: If a final notice of intent to levy (LT11 or Letter 1058) has arrived, the IRS gives 30 days from receipt to request a Collection Due Process hearing on Form 12153. “Currently Unable to Pay” is one of the collection alternatives listed on that form.

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What currently not collectible status is

When a taxpayer cannot pay because of financial hardship, the IRS may place the account in Currently Not Collectible status, meaning it has suspended most collection activities while the full debt stays owed. IRS Topic 202 frames the test as payment that would prevent the taxpayer from meeting basic living expenses.

Employee procedures are in IRM 5.16.1 (effective March 3, 2025), which says the IRS “balances the potential for collection against the costs and its ability to collect.” Accounts can be reported CNC for other reasons, such as when a taxpayer cannot be located, but hardship has its own closing codes (24 through 32) for individuals and certain owners who are personally liable. Revenue officers, appeals officers and settlement officers may report accounts CNC, generally with a manager’s approval, and a field hardship closing is confirmed with Letter 4223.

How the IRS defines hardship

IRM 5.16.1.2.9: “A hardship exists if a taxpayer is unable to pay reasonable basic living expenses.” The IRM bases its hardship procedures in part on Treas. Reg. § 301.6343-1(b)(4), which lets the IRS set a reasonable amount for each taxpayer’s circumstances, though those circumstances “do not include the maintenance of an affluent or luxurious standard of living.” The regulation lists the factors considered:

Age, employment history, ability to earn and number of dependents.
Amounts reasonably necessary for food, clothing, housing, medical care, transportation, current taxes, court-ordered payments and costs of earning income.
Local cost of living, and property exempt from levy that is available to pay expenses.
Extraordinary circumstances such as a medical catastrophe or natural disaster, and any other factor the taxpayer raises.

Under the IRM, hardship cases generally involve no income or assets, no equity, or income too low to pay anything without hardship; an account should not be reported CNC if income or equity could be collected without causing hardship. The regulation requires good faith and names falsifying financial information, inflating expenses and hiding assets as failures. TAS says there is no fixed income limit.

The financial information the IRS asks for

The IRS may ask for Form 433-F or Form 433-A (Form 433-B for businesses), plus documents verifying income, monthly living expenses, bank accounts and property. IRM 5.15.1 explains that Form 433-F is used by the Automated Collection System and the campuses, while the IRM 5.16.1 hardship section refers revenue officers to Form 433-A or 433-B. Form 433-F (Rev. 7-2024) covers accounts, digital assets, real estate, vehicles, credit cards, employment, other income and monthly living expenses; its instructions mention pay statements, bank statements, loan statements and recurring bills as documentation.

A statement is treated as current if less than 12 months old. For smaller balances (the limit is redacted in the public IRM), none is required when the taxpayer has a terminal illness or excessive medical bills, is incarcerated, lives only on Social Security, welfare or unemployment, or is unemployed with no income, though documents are still needed if IRS records do not confirm it.

How the Collection Financial Standards are used

The IRS measures expenses against its Collection Financial Standards, effective for financial analysis on or after June 29, 2026. They allow expenses necessary for the health and welfare of the taxpayer and family, or for producing income:

National standards for food, clothing and other items are allowed in full for the household size, without questioning the amount spent.
Out-of-pocket health care is allowed per person, in addition to health insurance premiums.
Local standards for housing and utilities (by county) and transportation are, in most cases, the lesser of the actual amount or the standard.

If the standards are inadequate for basic living expenses, the IRS may allow actual expenses with documentation. Nationwide amounts effective June 29, 2026:

Standard (effective June 29, 2026)	Monthly allowance
Food, clothing and other items, one person	$867
Food, clothing and other items, two / three / four persons	$1,558 / $1,857 / $2,176
Each person beyond four	Add $397
Out-of-pocket health care, per person under 65 / 65 and older	$90 / $163
Public transportation, per household	$220
Vehicle ownership cost, one car / two cars (lesser of actual payment; $0 with no loan or lease)	$703 / $1,406

Housing and vehicle operating amounts vary by location; see the IRS standards pages in the sources.

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A free, confidential evaluation is a starting point for reviewing a hardship request, the forms involved and any deadline printed on your notice.

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What CNC status does and does not do

Most collection pauses. TAS says the IRS generally will not levy, and Publication 594 says no new levy issues once the IRS agrees there is economic hardship.
The debt remains. It “is not forgiven or cancelled,” and TAS notes an annual bill still arrives. Penalties and interest keep accruing.
Refunds are applied. Section 6402(a) lets the IRS credit an overpayment against a tax liability.
A lien may be filed. IRM 5.16.1.2 says a Notice of Federal Tax Lien generally should be filed on CNC accounts owing $10,000 or more, subject to exceptions. See our federal tax lien guide.
Passports. The IRS excludes CNC hardship debts from § 7345 certification and reverses an existing one within 30 days.
New balances matter. TAS says later tax liabilities can end the status, and estimated payments are still expected.

The 10-year collection period

Under § 6502(a)(1), the IRS may collect by levy or court proceeding within 10 years after assessment (the Collection Statute Expiration Date, or CSED). The IRS, Publication 594 and TAS list events that suspend or extend that period, such as a pending installment agreement or offer, bankruptcy or a Collection Due Process hearing. CNC status is not among the events those sources list. The CSED for each assessment appears on the account transcript.

Levy release on hardship, and how it connects to CNC

Section 6343(a)(1)(D) requires the IRS to release a levy it has determined “is creating an economic hardship due to the financial condition of the taxpayer,” a decision IRM 5.11.2 says requires financial analysis and good faith. For wages, § 6343(e) is more specific: once the IRS agrees the tax is not collectible, it “shall release such levy as soon as practicable.” IRM 5.16.1.2.9 has employees release wage levies before closing an account as hardship.

A release is not permanent protection: § 6343(a)(3) allows a later levy. See our wage garnishment and bank levy guides.

How CNC status is requested

Calling the IRS at the number on the bill or notice, or 800-829-1040 (individuals) and 800-829-4933 (businesses), with financial information ready.
At a Collection Due Process hearing. Section 6330(c) lets taxpayers raise collection alternatives, and Form 12153 lists “Currently Unable to Pay,” noting Appeals “may consider freezing collection action until your circumstances improve.” Including Form 433-A is optional but speeds resolution.
Through the Taxpayer Advocate Service, an independent, free organization within the IRS, using Form 911 or 877-777-4778. IRM 5.15.1 refers disputes over a hardship determination to TAS.

TAS says a CNC denial itself cannot be appealed, but a taxpayer can ask for a conference with the Collection manager, and other collection actions may go to the Collection Appeals Program.

The IRM says open filing requirements must generally be resolved, and TAS says the IRS may ask for past-due returns. Both also say CNC hardship is possible with unfiled returns; the IRM ties this to a financial statement that can be verified. See our unfiled tax returns guide.

Reviews, reactivation and options if income rises

The IRS says CNC has no fixed time period. Under IRM 5.16.1, a hardship account can be reactivated when Total Positive Income, reviewed each year when a return is filed, rises above an amount tied to the case’s closing code. Employees may also set a follow-up when the ability to pay should improve sooner, such as when another debt is paid off.

When finances change, the usual alternatives are an installment agreement or an offer in compromise, which the IRM says employees should discuss before reporting CNC. The IRS generally won’t accept an offer if the debt can be paid through a payment plan or asset equity. Penalty relief is a separate topic; see our penalty abatement guide.

When an attorney matters

The IRS points taxpayers to the number on their notice, and the CNC procedures do not require a representative. Publication 594 states that an attorney, certified public accountant, enrolled agent or other person enrolled to practice can represent a taxpayer in collection, authorized on Form 2848. TAS lists hiring one of them as an option when a taxpayer disagrees with the IRS about ability to pay.

The credential matters mainly in court: under § 6330(d)(1), a taxpayer can petition the U.S. Tax Court within 30 days of a hearing determination, and a nonattorney must meet the Court’s admission requirements.

Taxpayers facing a levy, business income, home equity or a hearing deadline often ask an attorney to prepare the financial statement and weigh CNC against an offer. See our overview of the role of an IRS tax attorney.

Related guides

Frequently Asked Questions

Does currently not collectible status make the IRS debt go away?

No. The IRS says the full amount is still owed and is not forgiven or cancelled. Penalties and interest keep accruing, and federal tax refunds are applied to the debt.

How long does IRS hardship status last?

There is no fixed time period. Under IRM 5.16.1, a hardship account can be reactivated when income on a filed return rises above a set amount.

Can the IRS file a tax lien while an account is currently not collectible?

Yes. IRM 5.16.1.2 says a lien generally should be filed on CNC accounts when unpaid assessments total $10,000 or more, subject to exceptions.

Does the 10-year collection period stop during CNC status?

Under § 6502(a)(1), the IRS generally has 10 years after assessment to collect. The official IRS and TAS lists of events that suspend or extend that period do not include CNC status.

Can a denied CNC request be appealed?

The Taxpayer Advocate Service says there is no right to appeal a CNC denial, but a taxpayer can request a conference with the Collection manager or contact TAS.

Talk through a hardship request

Start a free, confidential evaluation to discuss your notices, your financial statement and the collection options the law provides.

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About the Author

Ray Neu

Ray Neu is the publisher of IRSAttorneys.net. A former law enforcement officer with a background in criminal justice and digital publishing, he oversees editorial direction, partnership standards, and compliance review for the site. He is not an attorney and does not provide legal advice; all tax law content is sourced and reviewed against the standards documented on the Editorial Team & Standards page.

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Sources

IRS Circular 230 Disclosure: To ensure compliance with Treasury Department rules governing tax practice, any tax information contained on this website was not written and is not intended to be used, and cannot be used, for the purpose of avoiding any federal tax penalty. You should consult a licensed tax professional regarding your individual situation.

Results described on this website are not a guarantee, warranty, or prediction of the outcome of any tax matter. Every situation is different. Prior results do not guarantee a similar outcome. Article content reflects general information about federal tax procedure as of the last reviewed date and may not reflect subsequent changes in IRS policy, regulations, or case law.