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Is the IRS taking your money and not leaving you anything on which to live? CNC may be your solution...

There are a number of IRS programs available for people who cannot afford to pay their tax bill in full. One such program allows a person to post-pone paying their debt and stops IRS collection action until in a better situation to pay. This grace period, if you will, is called Currently Not Collectible status. It is a great relief option for people who have had unexpected circumstances arise, such as an illness in the family, that depletes their financial resources. Currently Not Collectible status, otherwise referred to as CNC or Hardship Status, will buy a taxpayer time to get through the rough patch in their life and on their feet again. It is temporary, and penalties and interest still accrue while a taxpayer is in this status.

By some, CNC is almost looked at as the red-headed stepchild of tax relief. Though CNC is not as popular as an Offer-In-Compromise, it is still possible to reduce tax debt while in this status. The disadvantage: it is rare to reduce tax debt via this method and it takes strategic timing. The advantage: no down payment, fees, or monthly payments are required. It is best to have a tax professional monitor your account while in CNC for two reasons. One, a tax professional should be strategically planning the timing of all actions taken in a CNC case to optimize your chances at reduction. Two, the IRS may come back and reassess a taxpayer's ability to pay within 1-2 years and it is advisable to have a qualified tax professional standing by ready to defend you again if this happens.