Uncollectable Status

Stop IRS Collections

The IRS will put a taxpayer into Uncollectable Status if they can demonstrate that they do not currently have the ability to pay back their tax debt. This status is also frequently referred to as "Currently Not Collectable" or CNC.

Once a taxpayer's account is placed into Uncollectable status, the IRS will not pursue any collection action against them. This will effectively stop any IRS levies, seizures or wage garnishments from happening. The tax debt will still exist in the IRS records, but there will usually be a hold on any collection activity for at least a year. Once the taxpayer's financial situation improves, they can begin paying back the tax debt again.

Uncollectable Status does not permanently resolve a tax debt like an Offer in Compromise Settlement would, nor does it stop additional penalties and interest from accruing. What it does do is relieve the immediate burden when a taxpayer is not financially able to make payments on their debt.

If an individual is placed into uncollectable status, they can usually count on being left alone by the IRS for at least 12 months. However, the IRS does have the right to re-open the taxpayer's file at any time and request information about the taxpayer's ability to start making payments again. It is up to the taxpayer, or their representative, to prove to the IRS that they still qualify for uncollectable status when the IRS re-opens their file.

Washington Tax Services specializes is assisting small businesses and individuals with past due tax debts. We provide specialized tax help to clients who are dealing with the collections branch of the IRS. If you need help resolving an IRS or State tax debt, please fill out the form on this page or contact one of our tax professionals today at: (888) 282-4697.