Currently Not Collectible

Currently Not Collectible

Currently Not Collectible or CNC is a status that the Internal Revenue Service (IRS) and the California state Franchise Tax Board (FTB) do not largely talk about with taxpayers, although the FTB calls this a “hardship.” This is a status that the taxing agency can grant to a taxpayer, which takes that taxpayer out of collections for a period of time. The FTB grants this status in 6, 9 and 12 month periods, while the IRS reassesses every 12 months only.

CNC Status – Not A Permanent Solution

While in this status, a taxpayer’s debt continues to exist, and continues to accrue interest and penalties. This is not a solution, but achieving this status can be helpful as a bandaid to help a taxpayer in a tough position for a period of time. Created for severe economic hardship, this status is not easily granted by the taxing agencies to just anyone willy nilly. This is certainly considered an extraordinary event for the taxing agencies, and what you consider a hardship – they may not.

For example, citizens of the great state of California pay approximately $2.49 for a 20 ounce loaf of white bread. Citizens in Ohio will pay an approximate $2.00 for the same. Not so great a difference in general, but a difference of 19.7% as well. If that type of thinking is extrapolated to a general grocery shopping trip, one could say that it is more expensive to purchase groceries in San Diego, California than Brunswick, Ohio. However, in accordance with the IRS, things like groceries are averaged across all states and we are all allotted a monthly budget for things like grocery shopping. As such, people living in certain areas tend to spend more on some items than the IRS cares to allot for in the process of reviewing a taxpayer’s information for purposes of placing some taxpayers into the CNC status.

Are You Eligible for CNC Status?

Regal Tax & Law Group, PC will review your personal financials before ever calling either of the taxing agencies and disclosing any information to analyze whether or not a status of CNC is eligible or appropriate for you.

Contact Regal Tax and Law Group, P.C. for a free consultation with one of our tax attorneys.