How To Achieve IRS Non-Collectible Status in 2025

Many programs can help reduce your tax debt if you can’t pay the full amount, like an IRS offer in compromise. But what happens when you simply can’t afford to pay any of your tax debt and still put food on the table?

In these cases, finding tax debt help is easier than you might think. The IRS can designate some taxpayers as non-collectible, so you won’t be asked to pay your tax debt for the current financial year.

Of course, there are a few things you need to keep in mind before you try to achieve non-collectible status with the IRS. This guide is here to help you determine if becoming uncollectible is the best solution for your tax debt in 2025.

What Is IRS Non-Collectible Status?

As we’ve said, Currently Not Collectible (CNC) means that the IRS has acknowledged that you won’t be able to pay your tax debt and your living expenses at the same time. However, that doesn’t mean you’ll be exempt forever.

Typically, this is a good solution for taxpayers who have fallen on hard times, such as:

• Being laid off and unable to find suitable employment.

• Becoming injured or incurring other unexpected medical expenses.

• Being overwhelmed with other outstanding debts, like housing, car payments, and other loans.

For now, the IRS will stop trying to collect your tax debt, but you’ll be expected to start paying again once you’re back on your feet.

What Happens If You’re Considered Non-Collectible?

You can think of achieving IRS non-collectible status as a temporary break from your tax debt. As long as you’ve been designated as CNC, you won’t incur any new debts from the IRS, and no further collection attempts will be made.

Even so, the IRS can still take other actions to mitigate your tax, including things like:

• Withholding tax refunds and applying them toward outstanding tax debt.

• Filing a Notice of Federal Tax Lien (NFTL), which can hurt your credit score.

• Assessing interests and other penalties on your account.

• Contacting you to see if your financial status has changed since you were given CNC status.

Overall, getting a CNC designation is not a long-term solution for tax debt help, but it can be a great way to get back on your feet in times of financial hardship.

How To Apply For Non-Collectible Status:

To apply for IRS non-collectible status, you’ll need to contact the IRS directly over the phone. If you meet their qualifications, you’ll be asked to verify your financial status by submitting proof of your income, expenses, and previous federal income tax fillings.

If your CNC status is approved, you can still pay your debts down by making voluntary payments without losing your non-collectible designation. This helps show the IRS you’re serious about managing your debts and improves your chances of being offered further assistance later down the line.