There’s an old saying that “you can’t get blood from a stone.”
Many lawyers get introduced to it in law school. It’s a phrase that may have roots in ancient Bible stories, such as Cain and Abel, though its exact origins remain obscure.
In modern parlance, when lawyers use it, the impossibility of getting blood from a stone refers to not being able to collect a debt from someone who doesn’t have the money to pay it.
In this post, we will take note of a variation on this theme in the field of tax law. It is called “currently not collectible” status. As with many terms in tax law, there is an abbreviation associated with it: CNC.
In effect, this status means that the IRS has stopped trying to actively collect a tax debt. There are very specific policies and procedures that govern this. These procedures are detailed in the IRS revenue manual.
There a couple of basic reasons why the IRS may determine that a tax debt is not currently collectible.
One of these is that the IRS is unable to locate the taxpayer or the taxpayer’s assets.
Another is when the IRS determines that, due to financial hardship, the taxpayer is unable to pay his or her back taxes.
Of course, it is important to recognize a key qualifying word in CNC status. That is the word “currently.” If your financial condition improves, you may very well find the IRS at your door again.
That is why it makes sense to discuss your specific case with a knowledgeable tax law attorney.
To learn more about our practice, please visit our page on currently not collectible status.