Currently Not Collectible (CNC) Status — Definition Glossary

Defined by Sarah Mitchell, CPA | Reviewed by: James Okafor, EA

Full Definition

Currently Not Collectible (CNC) status, also called IRS Hardship Status, is a temporary IRS determination that a taxpayer cannot pay their tax debt without creating an economic hardship. When CNC status is granted, the IRS suspends active collection activity — bank levies, wage garnishments, and asset seizures — but does not stop interest and penalties from accruing. The IRS reviews CNC status annually and can reinstate collection if the taxpayer’s financial situation improves. CNC status does not reduce the debt — it only pauses enforcement. Businesses in CNC status with assets or growing revenue eventually lose the status and face resumed enforcement.

Why This Matters for Businesses With Tax Debt

Understanding Currently Not Collectible (CNC) Status is essential for any business owner navigating IRS enforcement. This term directly affects the options available for resolving business tax debt — including whether tax debt financing is available, how lien subordination works, and what enforcement the IRS can take.

Related Terms

Offer in Compromise, Installment Agreement, Financial Hardship

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Tax Funds connects businesses facing IRS enforcement with specialized financing solutions. If you are dealing with any of the situations described above, apply below — no obligation, no upfront fees.

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Type of Tax Debt *-- Select Tax Debt Type --IRS 941 Payroll Tax DebtFederal Tax LienIRS Bank Levy (Active Now)Trust Fund Recovery Penalty (TFRP)State Tax DebtOIC Bridge FinancingMultiple Types

Approximate Tax Debt Amount *-- Select Amount --$10,000 - $25,000$25,000 - $50,000$50,000 - $100,000$100,000 - $250,000$250,000 - $500,000$500,000+

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What enforcement actions are active? How long has the debt been owed? Any upcoming deadlines?

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Sources: IRS.gov; Internal Revenue Code (IRC); IRS Publication 594 (The IRS Collection Process); IRS Publication 1 (Your Rights as a Taxpayer). Tax Funds is a financing marketplace — not a lender, CPA firm, or law firm. This content is for informational purposes only.