Southern California IRS Non-Collectible Status Attorneys

Are You Unable To Pay IRS Debt? Get The Relief You Deserve.

Being placed on “Currently Not Collectible” status means the IRS has agreed to stop collection efforts for back taxes owed. It can happen after the IRS has reviewed the supporting evidence that proves a taxpayer cannot pay. Being placed on Currently Not Collectible status does not get rid of the tax debt you owe the IRS. Nor will it settle your tax debt. Currently Not Collectible is an important option for taxpayers who can’t afford to pay back taxes to the IRS and need some “breathing room” to sort out their financial affairs.

At Dallo Law Group, we understand that financial circumstances make it impossible to satisfy a tax debt without sacrificing basic living expenses. In these cases, the IRS offers a designation called “Currently Not Collectible” (CNC) status.

What Are The Benefits Of Currently Not Collectable Status?

Once this status is approved, the IRS will generally stop new collection actions and may release existing wage garnishments or bank levies, giving you the breathing room needed to stabilize your financial situation. Securing the Currently Not Collectible status offers many practical advantages for those struggling with economic troubles who have overwhelming tax liabilities:

An Immediate Stop To Collection Actions: The most significant benefit is the immediate halt of aggressive IRS tactics. This includes the stopping or releasing of wage garnishments, bank account levies, or the seizure of personal property.
Protection of Essential Income: CNC status ensures that your income is available to you, so you can pay your “allowable” living expenses, such as housing, food, utilities, and medical care, rather than being spent to try to satisfy an IRS debt.
Running the Statute of Limitations: The IRS generally has 10 years from the date a tax is assessed to collect a tax debt, known as the Collection Statute Expiration Date (CSED). Unlike some other resolution options, being placed in Currently Not Collectible status does not reset or extend this 10-year period. However, the statute may be suspended in certain circumstances. Once the CSED expires, the IRS generally can no longer take collection action on that tax debt.
Relief from Financial Stress: Taxpayers receive a “breather” from the constant pressure of IRS notices and the threat of unexpected financial disruption, allowing for long-term financial planning and recovery.
Protection of Basic Rights: While a Federal Tax Lien may still be filed to protect the government’s interest, being in CNC status can sometimes prevent more severe consequences, such as the revocation of a passport for “seriously delinquent” tax debt.
Flexible Review Periods: Depending on your financial profile, the IRS may not review your status for one to two years (or longer for those on fixed incomes), providing an extended period of stability.

This status is not a debt forgiveness program; rather, it is a formal recognition by the IRS that a taxpayer is experiencing significant financial hardship. When an account is placed in CNC status, the IRS may agree to temporarily pause active collection efforts after a detailed review of documented financial information, and at its discretion. It involves submitting a Collection Information Statement that shows your disposable income — income remaining after allowable living expenses — is insufficient to make payments toward the outstanding tax debt.

How can I achieve the Currently Not Collectible status?

To qualify for Currently Not Collectible status, you must provide evidence to the IRS that your monthly income is insufficient to cover your necessary living expenses, as measured against the IRS’s standardized “allowable expense” limits. The IRS will require you to disclose your financial information to substantiate your claim of financial hardship. After the IRS places a taxpayer in Currently Not Collectible status, it generally stops active collection actions such as garnishments and levies, subject to periodic review and compliance requirements.

What are the steps to achieving a Currently Not Collectible status in Southern California?

When Dallo Law Group works with a client, the process of being granted “Currently Not Collectible” status goes through the following steps:

Initial Hardship Consultation: The firm reviews your current financial situation (income vs. necessary living expenses) to determine whether CNC status is the most strategic option compared to other options, such as an Offer in Compromise or an Installment Agreement.
Tax Compliance Check: The attorneys ensure all required past-due tax returns (usually for the last 6 years) are filed. The IRS will not grant CNC status if you have unfiled returns.
Financial Statement Preparation (Form 433 series): Dallo Law Group’s team (often including CPAs and attorneys) helps you accurately complete the appropriate IRS Collection Information Statement, whether it is for business or personal.
Asset and Expense Analysis: The firm reviews your assets to see if the IRS would expect you to liquidate them. They specifically focus on “allowable” living expenses — standardized amounts the IRS permits for housing, food, and transportation — to argue that you have zero “disposable income.”
Negotiation and Submission: Our tax relief attorneys in Southern California then submit the hardship package to the IRS. Because they are local to Southern California, our team may be in direct communication with a local IRS Revenue Officer or the Centralized Case Management system to advocate on your behalf.
IRS Collection Freeze: Once the request is pending or approved, the IRS generally stops active collection actions such as wage garnishments and bank levies, although the IRS may still file a Notice of Federal Tax Lien to protect its interests.
Approval and Monitoring: After the IRS officially codes your account as CNC, the firm verifies that a “stop work” order is in place. We will advise you on how to respond to IRS notices related to your tax account and the periodic financial reviews required to maintain Currently Not Collectible status.

What happens next?

Even though active collection efforts are paused under CNC status, interest and penalties continue to accrue on the outstanding tax balance. The IRS may also file a Notice of Federal Tax Lien to protect its interests, even if it is not actively seizing assets. In some cases, CNC status can function as a waiting-game strategy; if the account remains in CNC status until the 10-year statute of limitations on collection expires, the IRS may ultimately write off the debt.

Why Choose Us?

While qualifying for a Currently Not Collectible status is determined by calculating the amount of your disposable income, the assistance of our experienced Southern California tax attorney can be a great benefit. We have a breadth of knowledge of what qualifies as “income” and “necessary living expenses” as defined by the agency. At our firm, we bring advanced tax knowledge and hands-on experience, helping clients secure CNC status and navigate complex financial hardship cases.

Our Founder, Michael Dallo, is not only a tax lawyer but also a Certified Public Accountant (CPA), holds a Master of Laws in Taxation (LL.M.), and is a Certified Tax Law Specialist (under the California Bar). The level of experience and knowledge our legal team offers is far beyond the ordinary. We understand that good people can run into severe financial problems, particularly in the current economic climate. We offer compassionate, responsive support to deliver the relief our clients deserve.

What are the alternatives to a Currently Not Collectible status?

Several tax debt settlement options could be available for you. Achieving a Currently Not Collectible status is one of five strategies to resolve the burden of tax debt. Even when the Currently Not Collectible status may not work for you, you may qualify for an Offer in Compromise (OIC), Installment Agreement, Partial Payment Installment Agreement, or, for some, filing for bankruptcy.

How can Dallo Law Group help you achieve Currently Not Collectible status?

Dallo Law Group practices exclusively in tax law and IRS collection matters, including Currently Not Collectible status. Providing our clients with real relief from the stress and uncertainty of tax debt is a significant part of our practice. We have the experience, knowledge, and technical know-how to pursue the best results for you. Unlike many of the nationwide tax resolution companies that advertise on television and radio, our local reputation and your satisfaction are of the highest importance to our firm.

Disqualified from Currently Not Collectible Status?

The IRS may disqualify a taxpayer from currently-non-collectible status (CNC) on the grounds that the taxpayer’s expenses are not necessary or the taxpayer’s income is more than what was claimed. Because we are top-tier negotiators with a breadth of understanding of the tax laws and the IRS rules and regulations, Dallo Law Group is aware of what arguments can be effective with the agency. We use our skills to work to maximize your chances of being placed on currently not collectible status. If you were not granted this status, we can help you request a conference with an IRS collection manager to review the decision and explore other collection resolution or appeal options.