TaxDelete Help Center

Your complete guide to IRS hardship programs and how TaxDelete helps you stop collections.

What is TaxDelete?

TaxDelete is a specialized document preparation service that helps taxpayers qualify for and file IRS Hardship (Currently Not Collectible) status. We focus exclusively on taxpayers who owe under $10,000 and meet IRS financial hardship criteria.

Unlike expensive tax relief firms that charge thousands of dollars, we offer a flat $149 fee to prepare and submit your hardship petition to the IRS. We're not lawyers or CPAs—we're specialists who understand exactly what the IRS needs to approve hardship status.

How to Use Our Site

Understanding IRS Hardship (CNC)

What is Currently Not Collectible (CNC) Status?

Currently Not Collectible (CNC) is an official IRS status code (53) that temporarily halts all collection activities when a taxpayer cannot afford to pay their tax debt and still meet basic living expenses. When the IRS grants CNC status, they acknowledge that attempting to collect would create economic hardship.

Think of CNC as a financial "pause button" on your tax debt. The IRS stops sending collection notices, won't levy your bank accounts or garnish your wages, and gives you breathing room to get back on your feet financially.

Who Qualifies for CNC Status?

To qualify for Currently Not Collectible status, you must meet specific IRS criteria:

Benefits of CNC Status

Important Limitations of CNC

How Long Does CNC Status Last?

CNC status can last anywhere from a few months to the full 10-year Collection Statute Expiration Date (CSED), depending on your circumstances:

• Temporary Hardship: If your financial difficulty is short-term (job loss, medical emergency), the IRS may grant CNC for 1-2 years and then review your situation.
• Long-term Hardship: If you have ongoing financial limitations (disability, fixed income, chronic unemployment), CNC may remain in effect until the CSED expires.
• Until CSED Expires: The Collection Statute Expiration Date is generally 10 years from when your tax return was processed and the IRS assessed the debt. Once the CSED passes, the debt is legally uncollectible and removed from your account.

CNC vs. Payment Plans: Which is Right for You?

Tax Relief Options Explained

The IRS offers several programs to help taxpayers who can't pay their tax debt in full. Each option has specific requirements, benefits, and drawbacks. Understanding your choices helps you make the best decision for your situation.

Currently Not Collectible (CNC)

Best for: Taxpayers with genuine financial hardship who cannot afford any monthly payment without sacrificing basic living expenses.

Installment Agreements (Payment Plans)

Best for: Taxpayers who can afford a monthly payment and want to actively resolve their debt. For debts under $50,000, you can set up a streamlined agreement without extensive financial disclosure.

Requirements: All tax returns filed, ability to make monthly payments, debt under $50,000 for streamlined agreements.

Offer in Compromise (OIC)

Best for: Taxpayers with a legitimate reason the IRS won't collect the full amount—such as doubt as to collectability (can't pay), doubt as to liability (amount is wrong), or effective tax administration (exceptional circumstances).

Requirements: All tax returns filed, not in an open bankruptcy, current with estimated tax payments and deposits. The IRS calculates your "reasonable collection potential" based on asset equity and future income.

Penalty Abatement

Penalty abatement removes penalties (but not interest or the underlying tax) from your account. There are several types:

• First-Time Penalty Abatement: Available if you have a clean compliance history for the past 3 years. You can request this yourself by calling the IRS.
• Reasonable Cause: If you had a legitimate reason for not paying or filing on time (serious illness, death in family, natural disaster), you may qualify.
• Statutory Exception: Penalties caused by incorrect IRS advice or erroneous IRS delays.

Best for: Taxpayers who can pay the tax and interest but struggle with additional penalties. Can be combined with CNC, installment agreements, or other relief options.

Innocent Spouse Relief

Innocent spouse relief protects you from being responsible for tax debt that resulted from your spouse's (or ex-spouse's) errors, fraud, or unreported income on a joint return.

Requirements: You filed a joint return with errors, you didn't know about the errors when you signed, it would be unfair to hold you responsible, and you're divorced, separated, or not living together.

Best for: Victims of financial abuse or deception by a spouse. This is a specialized area that typically requires professional representation.

IRS Knowledge Base

How IRS Collections Work

Understanding the IRS collection process helps you know what to expect and when to take action:

IRS Allowable Living Standards

When determining if you qualify for CNC or how much you can pay in an installment agreement, the IRS uses Collection Financial Standards to calculate your reasonable living expenses. These standards are based on Bureau of Labor Statistics data and vary by location and family size.

National Standards (Same for Everyone)

• Food, Clothing, and Other Items: Based on household size (e.g., $779/month for 1 person, $1,372 for 2 people)
• Out-of-Pocket Health Care: Based on age of household members (under 65 vs. over 65)

Local Standards (Vary by Location)

• Housing and Utilities: Based on county and family size. Includes rent/mortgage, property taxes, insurance, utilities, phone, internet.
• Transportation: Based on region. Includes vehicle operating costs (gas, insurance, maintenance) and vehicle ownership costs (loan/lease payments).

Official IRS Resources: National Standards, Local Standards (Housing), Local Standards (Transportation) are published on IRS.gov and updated annually.

Form 433-A: Collection Information Statement

Form 433-A is the IRS's financial statement for individuals. It's required for hardship status, installment agreements over certain amounts, and offers in compromise. The form collects detailed information about your:

• Personal information and household composition
• Employment and income sources
• Monthly living expenses
• Assets (real estate, vehicles, investments, retirement accounts)
• Bank accounts and balances
• Life insurance policies

The IRS uses this information to calculate your "reasonable collection potential"—essentially, how much they believe you can afford to pay based on your income, expenses, and available assets.

CSED: Collection Statute Expiration Date

The Collection Statute Expiration Date (CSED) is the date when the IRS's legal authority to collect a tax debt expires. Generally, the IRS has 10 years from the date they assess your tax debt to collect it. Once the CSED passes, the debt is legally uncollectible and will be removed from your account.

How the 10-Year Clock Works

The 10-year period begins on the assessment date—the date the IRS processes your return and officially records the amount you owe. For example:

• You file your 2020 tax return on April 15, 2021
• The IRS processes it and assesses $5,000 in taxes owed on May 1, 2021
• Your CSED would be May 1, 2031
• After May 1, 2031, the IRS can no longer collect the $5,000

Events That Extend the CSED

Certain actions can pause or extend the 10-year collection period:

• Bankruptcy: Collection period is paused during bankruptcy plus 6 months
• Offer in Compromise: Paused while the offer is being considered plus 30 days
• Collection Due Process Hearing: Paused during the appeal process
• Living Outside the U.S.: Time spent outside the U.S. for 6+ months doesn't count
• Innocent Spouse Relief Request: Paused during IRS review

Understanding Tax Liens

A federal tax lien is the government's legal claim against your property when you fail to pay a tax debt. The lien attaches to all your current and future assets, including real estate, vehicles, and financial accounts.

When the IRS Files a Lien

The IRS typically files a Notice of Federal Tax Lien when you owe more than $10,000. However, they can file a lien for smaller amounts if you've ignored collection notices or they believe you're trying to hide assets.

Impact of a Tax Lien

• Credit Report: Liens appear on public records and can significantly lower your credit score
• Property Sales: Difficult to sell real estate or vehicles with a lien attached
• Business Operations: Can affect business credit and vendor relationships
• Priority: IRS lien takes priority over most other creditors

Lien Release or Withdrawal

The IRS will release a tax lien when you:

• Pay your tax debt in full
• Complete an accepted Offer in Compromise
• The CSED expires
• Qualify for lien withdrawal after entering a Direct Debit Installment Agreement

Levy and Garnishment

A levy is the legal seizure of your property or income to satisfy a tax debt. Unlike a lien (which is a claim), a levy actually takes your assets.

Types of Levies

Releasing a Levy

The IRS will release a levy if:

• You pay the debt in full
• The CSED expires
• You enter an installment agreement
• You qualify for Currently Not Collectible status
• The levy creates an economic hardship

Refund Offsets

A refund offset (also called "refund intercept") occurs when the IRS automatically takes your tax refund and applies it to your outstanding tax debt. This happens for all taxpayers with unpaid taxes, regardless of whether they're in CNC status, on a payment plan, or have no arrangement at all.

How Offsets Work

When you file your tax return and are due a refund, the IRS checks your account for outstanding balances before issuing the refund. If you owe money, they automatically offset (take) all or part of your refund and apply it to the oldest tax debt first.

Offsets vs. Savings

This is why CNC status is not a "savings" program—it's a protection program. You're not saving money if the IRS is taking your refunds. However, what you ARE protecting is your bank accounts, wages, and income during the year. The value proposition is:

• Without CNC: IRS can levy your bank account, garnish wages, AND take your refund
• With CNC: IRS can only take your refund—your day-to-day finances are protected

Adjusting Your Withholding

If you're in CNC status or have a large tax debt, consider adjusting your W-4 withholding so you break even or owe a small amount at tax time instead of getting a refund. This way, you keep your money throughout the year rather than giving the IRS an interest-free loan that gets offset anyway.

Tax Relief Glossary

A-C Terms

Assessment

The formal recording of a tax liability on IRS records. The assessment date is when the 10-year CSED clock starts ticking.

Balance Due

The total amount you owe the IRS, including tax, penalties, and interest.

CNC (Currently Not Collectible)

An IRS status code (53) indicating the taxpayer cannot afford to pay their tax debt and collection activities are temporarily suspended.

Collection Due Process (CDP)

Your right to appeal certain IRS collection actions, including liens and levies, before an independent appeals officer.

CP Notice

Computer-generated notices from the IRS about your account. Different CP numbers indicate different issues (e.g., CP14 = balance due, CP504 = final notice before levy).

CSED (Collection Statute Expiration Date)

The date when the IRS's legal authority to collect a tax debt expires, typically 10 years from the assessment date.

D-I Terms

Failure to File Penalty

Penalty charged when you don't file your tax return by the deadline. Typically 5% of unpaid tax per month, up to 25% maximum.

Failure to Pay Penalty

Penalty charged when you don't pay your taxes by the deadline. Typically 0.5% of unpaid tax per month, up to 25% maximum.

Form 433-A

Collection Information Statement for Wage Earners and Self-Employed Individuals. Used to determine ability to pay.

Form 433-F

Collection Information Statement, simplified version of the 433-A used for streamlined installment agreements.

Fresh Start Initiative

IRS program launched in 2011 that expanded access to installment agreements, streamlined offers in compromise, and increased lien thresholds to help taxpayers.

Garnishment

See Wage Levy. The continuous withholding of wages to satisfy a tax debt.

Hardship

A financial condition where paying the IRS would prevent you from meeting basic living expenses for yourself and your dependents.

Installment Agreement (IA)

A payment plan with the IRS that allows you to pay your tax debt over time in monthly installments.

Interest

Charges on unpaid tax debt, calculated from the tax return due date. Rate is the federal short-term rate plus 3%, compounded daily.

L-P Terms

Levy

The legal seizure of property or income to satisfy a tax debt. Can be applied to bank accounts, wages, Social Security, contractor payments, etc.

Lien

A legal claim against your property for unpaid taxes. Makes it difficult to sell assets and appears on credit reports.

Local Standards

IRS allowable expense amounts for housing and transportation that vary by county and region.

National Standards

IRS allowable expense amounts for food, clothing, housekeeping supplies, personal care, and miscellaneous items. Same nationwide, varies by household size.

Notice of Federal Tax Lien (NFTL)

Public document filed with local authorities when the IRS places a lien on your property. Makes the lien part of public record.

Offer in Compromise (OIC)

An agreement with the IRS to settle your tax debt for less than the full amount owed. Difficult to qualify for and requires significant documentation.

Offset

The automatic seizure of tax refunds or federal payments (like Social Security) to pay outstanding tax debt.

Penalty Abatement

Relief from penalties (but not tax or interest) based on reasonable cause, first-time penalty abatement, or statutory exceptions.

Partial Payment Installment Agreement (PPIA)

An installment agreement where monthly payments don't cover the full debt before the CSED expires. Difficult to qualify for; CNC is often easier.

R-Z Terms

Reasonable Collection Potential (RCP)

The IRS's calculation of how much they can collect from you based on your asset equity and future income. Used in OIC and PPIA determinations.

Revenue Officer (RO)

An IRS field agent assigned to collect unpaid taxes through face-to-face contact. More serious than automated collection notices.

Status 53

IRS internal code for Currently Not Collectible status.

Statute of Limitations

Time limits on IRS actions. 10 years to collect (CSED), 3 years to audit most returns, 6 years if you understated income by 25%+.

Streamlined Installment Agreement

Simplified payment plan available if you owe less than $50,000. No financial statement required; can set up online or by phone.

Tax Transcript

IRS record showing your filing history, payment history, and account status. Available free from IRS.gov or by mail.

Wage Levy

Continuous garnishment of wages sent directly to the IRS from your employer. Remains in effect until the debt is paid or the levy is released.

Account & Billing

Pricing

Why So Affordable?

Traditional tax relief firms charge $2,000-$5,000+ for the same service. We can offer $149 because we:

• Specialize exclusively in CNC hardship (we don't do everything)
• Use technology to streamline the process
• Focus on volume for taxpayers who owe under $10,000
• Don't employ expensive sales teams or run TV ads

Payment Process

What You Get for $149