Is IRS Uncollectible Status Really an Option?

Yes. In certain cases, the IRS will allow a delinquent taxpayer time without making payments toward a back tax debt, if making a payment would cause a hardship. This is called Currently Not Collectible (CNC) status, sometimes referred to as Uncollectible or Status 53.

The process to secure CNC status is similar to that of a non-streamlined Installment Agreement. The good news is that you may be able to secure CNC status with one phone call to the IRS, though the IRS will require you to complete a Collection Information Statement form 433-A or 433-F. You may also be required to provide backup documents to support the information on your completed form. To secure CNC status, taxpayers generally need to prove a lack of equity in assets and the inability to make a monthly payment of $25 or more.

CNC status lasts for a set period of time determined by the IRS, usually based on your Total Positive Income (TPI), during which time you must maintain current tax compliance.  Your TPI is reviewed annually when you file your income tax return.  The IRS may request an updated form 433-A or 433-F in order to determine whether or not you qualify for another CNC period. If not, you may need to negotiate a monthly Installment Agreement or Offer in Compromise.

CNC status does not extend the Collection Statute Expiration Date (CSED).