How Long Will a CNC Status Protect You From the IRS?

You’ve done the hard work of proving that your tax account is currently not collectible (CNC). The result? Temporary relief from IRS efforts to collect on your debt. Unfortunately, this relief may be short-lived.

A lot depends on your financial situation, but you can expect the IRS to make every effort to have your account once again deemed collectible. Keep reading to determine how long you can receive protection via CNC status.

Annual Attention From the IRS

Your account is far from safe after it is highlighted as currently not collectible. From this point on, you best be prepared for regular check-ins from the IRS.

Typically, representatives look at CNC accounts at least once per year to determine whether taxpayers still qualify. If any aspect of your financial situation changes considerably — for example, if you get a new, higher-paying job — you can expect the IRS to resume collecting on your account.

Even if you continue to qualify, interference remains a real possibility. For example, the IRS may apply future tax refunds to your debt via a dreaded practice known as the “refund offset.”

The Collection Statute of Limitations

In rare cases, tax debt remains uncollectable for years on end. In some situations, this period may extend long enough to qualify for permanent relief from the IRS. Often referred to as the collection statute of limitations, this possibility requires, at minimum, ten years of sustained CNC status.

Before you get too optimistic about the IRS writing off your tax debt, keep in mind that actions such as filing for an offer in compromise may extend the statute. This could make it necessary to continue qualifying for CNC status well after a decade of the initial approval.

Whether your account qualifies as not collectible or you need to seek an alternative solution for your tax situation, you can count on the team from the Highland Tax Group for guidance. Contact us today to learn how we can help you obtain — and maintain — CNC status.