Currently Not Collectible status may temporarily pause IRS collection activity when a taxpayer is experiencing financial hardship, but it does not erase the tax debt or eliminate future compliance responsibilities. While in CNC status, you must continue filing required returns, remain honest about your financial situation, and respond to any IRS requests for updated information. These guidelines can help you maintain compliance and avoid actions that may put your status at risk.

Do:

1. File all required tax returns and stay current with estimated payments.
2. Be transparent about income, expenses, and asset equity.
3. Understand that refunds will be applied to the outstanding IRS balance.
4. Respond promptly to any IRS reviews or requests for updated financial information.

Do not:

1. Ignore IRS notices. Prompt response to correspondence is critical.
2. Take on new tax debt (e.g., under-withholding or missing your estimated tax payments).
3. Assume the agreement is approved until the IRS officially confirms it.