FAQ For IRS Non-Collectible for Businesses

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As a business owner dealing with serious debt, you’re desperate for a temporary reprieve. If you’re incapable of getting a handle on your IRS debt at this time, a short-term solution may be available in the form of Currently Not Collectible (CNC) status. Available for businesses, this option places a temporary hold on your need to pay back the IRS.

Which businesses qualify for CNC?

In general, CNC is not available for large corporations. Eligibility is limited to the following:

  • Sole proprietors
  • LLCs if the individual owner is a liable taxpayer
  • Partnerships if the general partner is liable
  • Joint or individual IMF assessments

How do I apply for CNC for my business?

If you decide that it’s in your best interest to seek CNC status, you may be asked to complete Form 433-F: the Collection Information Statement. This document involves a variety of details about your business and your current financial status. Be prepared to provide information on your personal assets, as well as accounts receivable and employee income, if relevant.

How will CNC impact my tax debt?

CNC status does not eliminate your debt. In fact, a temporary delay in collections will likely increase your total liability, as you will continue to be charged interest and other penalties. While the IRS maintains a statute of limitations of ten years, CNC status may not last long enough to help you avoid paying up before this date.

How long can my account remain non-collectible?

CNC status is not indefinite. If you’re lucky, you’ll reach the statute of limitations before your situation changes enough to force you to resume making payments. Otherwise, the IRS will closely assess your situation to determine eligibility changes. As time passes, you may need to provide updates on your financial situation, including extensive documentation of assets and accounts receivable.

The IRS experts at the Highland Tax Group are happy to answer any additional questions you may have about CNC business status and other tax concerns. Reach out today for more information.