The IRS can grant Currently Not Collectible Status (“CNC”) to individuals or businesses that are determined to be unable to repay their delinquent taxes.  
Penalties and interest will continue to accrue on the unpaid taxes, but the IRS generally will not take any enforcement action such as bank levies, wage levies (garnishments), seizure of assets, and accounts receivable levies while a taxpayer’s account is in CNC status. However, the IRS will very likely file a Notice of Federal Tax Lien for liabilities in excess of $10,000 (if it hasn’t already) prior to granting CNC status.
The IRS has a laundry list of reasons why it might place a taxpayer into CNC, most of which aren’t applicable to a business or individual who is actively looking for relief from the IRS (taxpayer is deceased, business entity is defunct or bankrupt, unable to locate taxpayer, etc.).
For the rest of us — operating businesses and living individuals who haven’t vanished — obtaining CNC status will require two things:
    1. The taxpayer must be in compliance with all current tax obligations (e.g. all tax returns have been filed, current tax obligations are being paid); and    2. The taxpayer must demonstrate, usually via full financial disclosure, that it is able to pay current tax obligations, but unable to pay anything towards the tax debt. For individuals, this means that the individual will not be able to meet their necessary living expenses while repaying anything toward their tax liability. For businesses, this means that the business will not be able to meet its necessary business expenses while also repaying anything toward its tax liability.
There are regularly recurring reporting requirements to maintain the CNC status and it is possible to remain in the status until the statute of limitations on collecting the tax has expired. (Generally, the IRS has ten years from the date the tax is assessed to collect the balance due.)
Find out if this option is for you, call us today!