CNC: The IRS Fresh Start Program's Hidden Gem
Updated: Nov 3, 2021
The IRS Fresh Start Program is a program designed to help taxpayers who owe back taxes. One of the less publicized features of this program is Currently Non-Collectible Status (CNC). The status of CNC is given to taxpayers who have been found unable to pay their outstanding tax debts by the government. The IRS collection process is temporarily halted when an account is labeled as CNC, which means no harassing letters, intimidating phone calls, or threatening levies will be sent.
Currently Not Collectible
If the IRS determines that you are unable to pay any portion of your tax debt, your account may be marked as Currently Not Collectible, delaying collection until your financial situation improves. The fact that your debt is Currently Not Collectible does not mean it will go away; it just means the IRS has assessed that you cannot afford to pay it at this time.
You are still obligated to file tax returns and keep records of any income earned during this period, but your debt cannot be collected until the IRS deems it currently collectible again. Additionally, interest continues to accrue on your existing outstanding balance at a rate determined by law.
In order to be Currently Not Collectible, you must first show complete and total inability to make any payment on your debt at all--and there are some qualifications in place for this as well: You must not earn any money during the period of your CNC, and you must not have any assets or other sources of income that can be used to pay back the debt.
IRS Fresh Start Program
The Currently Not Collectible status also happens to be one of the four major components in the IRS Fresh Start Program. There are many programs that are offered in order to solve your tax-related issues in some sort of way. But there is a new and improved relief program that consolidates many major relief programs into a one-size-fits-all assistance program; The IRS Fresh Start Program.
This program is designed to relieve not only the IRS, but also your back taxes. It does this by making sure you are filing accurately and gives up-front payment options solutions for those who can't afford their tax debt payments. This relief program utilizes four of the major tax resolution strategies into one consolidated program!
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