IRS Hardship Relief Services

Tax Attorney Representation for Currently Not Collectible Status

Commonly known as IRS hardship relief, the Currently Not Collectible (CNC) status is a tax relief method for taxpayers who can’t make any payments towards their tax debts without experiencing economic hardship. When a tax account is in CNC status, the IRS temporarily stops collection activities. 

Let our CNC services help you get relief from IRS collections. The Law Offices of Stephen B. Kass provides comprehensive tax resolution services. Reach out to us today to find out more about how we can help you. 

Stephen B Kass is a tax attorney and CPA. Based in New York, he’s ready to help whether you’re on Long Island, NYC, or anywhere else.

You’re in the Right Place If…

Our currently not collectible services are a good fit for clients experiencing these types of situations:

• Your income barely covers rent, food, and medical costs, while IRS notices keep coming in the mail.
• Your only income source is retirement or disability payments that exclusively cover basic living expenses. 
• You lost your job or have a fixed income that isn’t enough to get by and pay your tax debts.
• You are experiencing a medical emergency or illness that impacts your finances.
• You’ve just closed your business, but still have tax debt.
• You received a wage garnishment or levy notice from the IRS and can’t afford to pay any amount without experiencing hardship.
• You became a caregiver for a sick family member, gave up employment, have no savings, and you can no longer afford to pay your tax debt.

Not sure? Then, contact us for a case review. If CNC is the best option, we’ll help you secure relief and stop IRS collections. If not, we’ll pursue another strategy to resolve your tax debt.

What Is the Currently Not Collectible Status?

Currently Not Collectible status (Status 53) applies to people who owe back taxes but cannot pay those debts without experiencing an economic hardship. According to the IRS, economic hardship occurs when a tax payment prevents you from meeting basic, reasonable living expenses such as rent, food, and medical care. 

Just because you’re struggling with bills doesn’t mean the IRS will approve your CNC status request. Also, if you make any mistakes on your financial statements, you can easily appear wealthier or capable of paying more than you can afford, leading to the rejection of your request. 

This is why you should consult a tax professional when applying for CNC status. 

Stephen Kass has worked with many taxpayers on CNC status. Here’s an example of a case that he has worked on: 

What to Expect If the IRS Approves Your CNC Status Request

If your request is approved, here’s what to expect when your tax account is in CNC status:

• If your tax debt reaches its CSED while still in CNC status, it is discharged because the IRS can no longer legally collect it.
• The IRS will stop any active collections, such as wage garnishment and bank levies.
• You still owe the full amount of your tax debt – it’s not forgiven or canceled, but as noted above, if the collection period expires, you won’t have to pay.
• Your tax debt will continue to accrue interest and penalties. 
• The IRS can still place a federal tax lien when your account is in CNC status.
• The IRS can apply your federal tax refund to your tax debt, but setting up the correct withholding can reduce the effect.
• The IRS will periodically review your financial situation and will resume collection activities once you can pay any amount without financial hardship.

How CNC Stops IRS Enforcement

Once your CNC status is approved, the IRS temporarily stops IRS tax collections. Here’s how this manifests:

• Levy and seizure freeze: The IRS updates your tax account code to Transaction Code 530 (Status 53), which automatically suspends active collections such as bank account levies, wage garnishments, and property seizures.
• Collection pause: The automated billing cycle, including collection notices, stops, but you may still receive an annual reminder of your balance.
• The 10-year clock continues. This is critical because if the 10-year period runs out while you’re in CNC status, the debt will expire permanently. 
• Passport certification: If you have a seriously delinquent tax debt and the IRS has revoked your passport, once the CNC status is in effect, the IRS will clear your passport restrictions within 30 days so you can renew your passport. 
• Emergency exception: In most cases, the IRS doesn’t approve tax relief options if a taxpayer isn’t tax-compliant, including having unfiled tax returns. However, if you’re facing an immediate financial emergency like a wage garnishment that’s causing financial hardship, the IRS can grant CNC status even with unfiled tax returns. The IRS agent will then notify you of your unfiled tax returns and allow you enough time to submit them. 

How Our Tax Attorney Handles CNC Cases

Here are the steps that Stephen uses when you approach him to work on your CNC status request:

• Pull transcripts: He first reviews your tax history to understand your finances and tax debt fully. 
• Get into compliance: After reviewing your transcripts, he ensures you’re compliant by filing any unfiled tax returns, if you have any, in case you need to explore other tax relief options. The IRS will only approve some tax relief options if you’re compliant with tax laws.
• Compare CNC against other options before committing: He then evaluates what the best tax relief method for you is. Here is how some of the tax relief options compare: 
• Offer in compromise (OIC): This option allows you to settle your debt for less than you owe. 
• Installment agreement: This option allows you to pay your tax debt in monthly payments. 

If you can afford to pay an amount towards your tax debt and your tax debt is very far from CSED, he may suggest OIC if you’re eligible. He can also recommend an installment agreement like PPIA, where you pay the amount you can afford towards your tax debt, or pursue penalty abatement to reduce your balance owed through penalty removal. If you can’t afford any amount, he moves to the next phase of applying for CNC status. 

• Build Form 433 & submit your request: Stephen will help you build your financial statement accurately against the IRS Collection Financial Standards, which is critical in this process.
• Handle all IRS contact: He will handle all communication on your behalf and submit any extra information or supporting documents that the IRS may need.
• Account monitoring: If CNC status is granted, he monitors your account, responds to periodic reviews, and ensures ongoing compliance to maintain the status.

Does New York State Offer CNC?

CNC status is not available in New York State. However, the NY Department of Taxation and Finance offers installment agreements and offers in compromise to help taxpayers find relief. You can also dispute a tax assessment in New York if you believe it is incorrect.

If the IRS approves you for CNC status, you may still need a different resolution for your state taxes. Coordinating both of these moving parts is part of the work we do for you at the Law Offices of Stephen B. Kass – learn more about our NY tax resolution services. 

When to Hire an Attorney for CNC 

Most CNC cases require professional help. It’s especially important in the following situations:

• A levy, garnishment, or Letter 11 is active or imminent.
• You have a Revenue Officer assigned to your case.
• You owe a large balance (over $50,000), and the financial statement will be scrutinized closely.
• Your collection statute may be close to expiring.
• You have unfiled returns, complicating your options.
• You were already denied or removed from CNC.

You need an expert on your side to explain tax laws, evaluate your complete tax history and financial situation, and guide you on the right path forward.

Why Choose Stephen B. Kass?

There are several reasons you should consider working with Stephen B Kass. Here are a few of them: 

• Dual credentials: Stephen is a CPA and a tax attorney, so you get the best of both worlds: great accounting merged with extensive knowledge of tax laws. If he’s preparing for a CNC status request, he’ll tap into his accounting skills to do the math and his law degree to argue why you’re eligible. 
• Solo practitioner: What you read is what you get because Stephen doesn’t outsource any of his clients; he works directly with you throughout the process.
• Experience: In addition to his strong dual credentials, Stephen has more than 31 years of experience. During these years, he has learned the best ways to communicate with the IRS and what the IRS considers when approving CNC status requests. 
• He’s not intimidated by big numbers: Stephen has experience working with clients who owe $100K to $1M+, where the IRS scrutinizes hardship claims hardest. 
• He values integrity: Stephen won’t let you apply for CNC status when he knows you’re not going to get approved, or it’s not your best tax relief option. He will give you his honest professional opinion. 

Find Out If You Qualify for CNC Status

Before you apply for CNC status, it’s important to know whether you qualify. Many taxpayers think that just because they’re having money problems, they qualify for CNC status, which isn’t always true.

The risk you get when you apply when you don’t qualify isn’t rejection, but a higher tax bill because penalties and interest keep accruing while the IRS is evaluating your CNC request. 

You’ve also handed the IRS your financial road map through the disclosure forms, which it can use to force you into an aggressive monthly installment agreement or issue levies. 

Schedule an appointment with us and confirm whether you’re eligible before spending time and money applying for the CNC status. If you don’t qualify, Stephen will recommend another tax relief option. 

Frequently Asked Questions About IRS CNC Status