When your income is insufficient to cover allowable living expenses and IRS payments, the IRS can place your account in Currently Not Collectible status, suspending all levy and garnishment activity. Our team helps qualifying New Mexico taxpayers achieve and maintain CNC status.
Currently Not Collectible (CNC) status is an IRS classification that temporarily halts all collection activity against a taxpayer who cannot afford to make payments without falling below the IRS's own allowable expense standards. When an account enters CNC, wage garnishments stop, bank levies stop, and Revenue Officer contacts pause. The IRS CNC program overview explains the basic requirements.
CNC is not debt forgiveness. The balance continues to accrue interest, and the IRS can resume collection once your financial situation improves. It is, however, a critical breathing-room tool for taxpayers who are genuinely unable to pay and need time to stabilize.
Qualification is based on a financial analysis using Form 433-A (individuals) or 433-B (businesses). The IRS compares your monthly income to allowable monthly expenses under the Collection Financial Standards. If income equals or falls below allowable expenses, you qualify. The analysis is fact-specific and requires careful documentation.
The IRS generally has ten years from assessment to collect a tax liability. CNC status does not toll that statute, so a taxpayer who achieves CNC early in the collection window may find that the statute expires before the IRS can resume collection. Strategic management of the collection statute is a key part of our CNC practice. If CNC is not the right fit, we explore Offer in Compromise or installment agreement options in parallel.
Ready to resolve this? As the tax attorney team Albuquerque and New Mexico trust, we offer a free consultation with a resolution specialist — available by phone Monday through Friday. Request a callback or call (505) 420-3320.
Our team resolves the full range of IRS enforcement actions: from wage garnishments and bank levies to federal tax liens, Offers in Compromise, and audit representation. Business owners dealing with payroll tax issues or a Trust Fund Recovery Penalty notice will find dedicated support as well.
We serve all communities in the greater metro: Rio Rancho, Santa Fe, Los Lunas, Bernalillo, Corrales, Belen, Edgewood, and Española, in addition to clients statewide for federal matters.
15 minutes with our resolution team. A concrete plan, yours to keep. No obligation, no pressure.
