Currently Not Collectible eligibility: how IRS hardship status works

The IRS can place an account in Currently Not Collectible (CNC) status when collection would create an economic hardship — meaning you couldn't meet reasonable basic living expenses. In practice, that means:

• Your income is at or below your allowable living expenses under the IRS Collection Financial Standards.
• You have little or no equity in assets that could be sold or borrowed against.
• You've filed required returns (the IRS may still grant CNC with some compliance gaps in hardship cases, but expect to be asked to file).

Common examples: retirees on Social Security only, people who are unemployed or disabled, and households where income barely covers housing, food and medical costs. Screen yourself with the hardship calculator.

For smaller balances, the IRS may approve CNC over the phone after asking about income, expenses and assets. For larger balances, expect to complete Form 433-F or 433-A and provide pay stubs or benefit statements, bank statements, rent or mortgage statements, utility bills, and medical expense records. Expenses above the national and local standards need justification.

• Collection pauses — no new levies or garnishments.
• Interest and penalties continue to accrue.
• Refunds are kept and applied to the balance.
• A lien may be filed, generally if the balance exceeds $10,000.
• The 10-year collection statute generally keeps running, so some balances expire while in CNC.
• The IRS reviews your income periodically, often using your tax returns, and can resume collection if your situation improves.

There's no fixed term. It lasts until your finances improve enough to pay, until the collection statute expires, or until you resolve the debt another way. If your income rises substantially, the IRS may contact you for updated financial information and propose a payment plan.

CNC is a pause, not a resolution. If your hardship is likely permanent and your reasonable collection potential is low, an Offer in Compromise may close the debt for good — see CNC vs Offer in Compromise. If you can pay something each month but not the full balance before the statute ends, a partial-payment installment agreement may fit.

The IRS decides CNC requests on evidence, so gather it before you call. Typical documents include: your last two or three months of pay stubs or benefit statements (Social Security, pension, unemployment, disability); three to six months of bank statements for every account; your lease or mortgage statement; recent utility bills; car loan or lease statements and insurance; health insurance premiums and recurring medical bills; court-ordered payments such as child support; and proof of any current tax payments. Self-employed people should add a profit-and-loss statement. Fill out Form 433-F (or 433-A if a revenue officer asks) carefully, and make sure the totals match your statements. Where your actual expenses exceed the national or local standards, the IRS generally allows only the standard unless you can show the higher cost is necessary. Being organized shortens the call and reduces follow-up requests.

If you've received a final notice such as LT11, you can request CNC as an alternative in a Collection Due Process hearing.

1. Gather proof of income and monthly expenses.
2. Compare them with IRS standards using the living expenses worksheet.
3. Call the number on your latest notice (verified on IRS.gov) and explain you can't pay basic living expenses.
4. Complete Form 433-F or 433-A if asked, with documentation.
5. Keep filing returns each year — the IRS will use them to review your status.