CNC Eligibility Calculator
By Forrest Baumhover, CFP®, EA · Last verified September 28, 2026
Check Hardship Currently Not Collectible eligibility per IRM 5.16.1.2.9 — income vs. IRM 5.15.1 allowable living expenses, and net realizable equity in assets.
The CNC (Currently Not Collectible) Eligibility Calculator applies the IRS's Hardship test to a Collection Information Statement: income against allowable living expenses, and equity in assets. It is the only CNC closing-code category this tool evaluates, and it turns on a financial calculation. It serves practitioners assembling the statement first.
The two-pronged hardship test
IRM 5.16.1.2.9 reaches four taxpayer types: individual and joint accounts, sole proprietorships, partnerships with a personally liable general partner, and LLCs with an individual owner identified as the liable taxpayer. A hardship exists when the taxpayer cannot pay reasonable basic living expenses. The calculator tests that with two prongs: gross monthly income against allowable expenses under the National, Local Housing, and Local Transportation Standards (IRM 5.15.1); and net realizable equity in assets (quick-sale value, generally 80% of fair market value, less secured debt). A qualifying account closes under one of the Hardship closing codes, 024 through 032.
Worked example: a single parent with one dependent, age 10, lives in Autauga County, Alabama, and earns $2,800 gross a month. Allowable expenses:
- National Standard (food, clothing, other items, out-of-pocket health care): $1,738
- Housing and utilities: $1,871
- Transportation: $994
- Total allowable expenses: $4,603 — income falls $1,803 short
Their one asset, a car worth $6,000, carries $5,500 in secured debt against a $4,800 quick-sale value, leaving no net equity. Both prongs show hardship: the calculator returns eligible for Hardship CNC. These Standards figures are one dated snapshot, due for this tool's own re-check by June 2027 — the IRS updates the underlying Standards at least annually, so run the live calculator above for a real case rather than reusing this example's numbers.
The rule to give a client: Hardship CNC needs both prongs — a real income shortfall against the Standards, and equity that's genuinely unreachable, not merely absent.
The judgment-call boundary: hardship income, but equity in assets
Change one fact in that example — the car carries $2,000 in secured debt instead of $5,500 — and $2,800 of net equity survives the quick-sale discount. Income still falls short of allowable expenses, but the taxpayer now holds realizable equity. IRM 5.16.1.2.9 supplies no bright-line rule for that combination: a revenue officer decides, case by case, whether the equity sits in exempt or necessary property, whether the IRS should require liquidation first, or whether pursuing it makes sense against the cost of collection. This calculator reports that combination as borderline rather than forcing eligible or not eligible — the genuine judgment call belongs to the assigned revenue officer, not to a rounding rule.
The rule to give a client: a shortfall on income doesn't erase equity — if there's cash the IRS can reach, CNC is the revenue officer's call, not an automatic yes.
CNC and the collection statute: patience as a strategy
CNC status does not stop the ten-year collection statute (the CSED). A client in CNC can pay nothing and see the liability expire with the statute, but interest keeps accruing and the IRS can reactivate a hardship case. Before recommending an Offer in Compromise (OIC) or installment agreement (IA) to a hardship-eligible client, check the CSED with the CSED Calculator: CNC through statute expiration can resolve a liability at lower cost than either alternative, particularly for a client already close to their CSED.
One trap this comparison hides: under IRC §6331(k)(3), filing an OIC or IA request suspends the CSED while pending, plus 30 days and any appeal after a rejection — though not for the life of an agreement already accepted. "Testing the waters" with either one before settling on CNC can erase part of that advantage. Decide before filing anything, not after.
What this tool does not evaluate
IRM 5.16.1 closes an account CNC under several other subsections, each turning on a status fact rather than a calculation: Unable to Locate or Contact, Statute Expiration, Bankrupt Corporations, Decedent Estates, Tolerance, Defunct Entities, In-Business Unable to Pay, Insolvent Financial Institutions, and International accounts. A business entity outside the four Hardship-eligible types (a corporation, an exempt organization, or a multi-member LLC not electing individual-owner treatment) may still qualify for CNC under one of those, just not through this calculator.
Tolerance closures (closing code 09) and the Collection Information Statement verification waiver both turn on dollar thresholds the public IRM text redacts as sensitive. This tool displays the account's aggregate balance for reference only and never computes either threshold — confirm the current figures with the assigned revenue officer, or by calling the Practitioner Priority Service if none is yet assigned, before relying on a tolerance-based closure.
When this tool is not enough
- The calculator returns borderline — a revenue officer, not this tool, resolves that case.
- The taxpayer type is a corporation, exempt organization, or multi-member LLC that does not elect individual-owner treatment.
- A closure might rest on Tolerance, Statute Expiration, Bankruptcy, or any status-based category this tool does not evaluate.
- The equity or income figures depend on values close to a Standards threshold, where a small correction could flip the result.
Common Questions
What is Currently Not Collectible status?
A temporary IRS determination, under IRM 5.16.1, that a taxpayer cannot pay a tax debt right now. It generally suspends active collection — no new levy action — while the account remains in that status, though the IRS can still offset a refund against the balance.
Does CNC status stop interest and penalties from accruing?
No. CNC only pauses collection action. Interest under IRC §6601(a) and any applicable penalties continue to accrue on the unpaid balance for as long as it remains unpaid.
How long does CNC status last?
Until the taxpayer's financial situation changes, or the IRS periodically reviews the account and finds the taxpayer can pay again. It is not permanent relief on its own — but see above: the ten-year collection statute keeps running in the background unless a separate suspension event stops it, and CNC held to that date can end the liability outright.
Does having equity in a home rule out CNC?
Not automatically. This calculator treats a hardship-income case with asset equity as borderline rather than disqualified — the IRM leaves the revenue officer to decide whether that equity is exempt or necessary property, or worth pursuing against the cost of collection.
Is there a minimum debt amount for CNC?
No minimum balance appears in the published Hardship test itself. A separate, lower-friction Tolerance closure exists for small balances, but the public IRM text redacts its dollar threshold — confirm the current figure with the assigned revenue officer.
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Need help with your specific situation?
This tool gives you the numbers and the citation, but every case has details a calculator can’t weigh. For a second opinion from a tax professional, email Forrest directly. Do not email Social Security numbers, account numbers, or other sensitive information. An email creates no client-practitioner engagement; case-specific advice starts only after both parties have mutually accepted terms and payment has been made.
Email Forrest Baumhover, CFP®, EA →Read the Deep Dive behind this tool: Deep Dive: The Complete IRS Collections Timeline