CNC Strategy Question


#1

I know about filing for CNC status to run the clock on the Statute. Just to be clear, they have to actually meet the requirements for CNC status to use this strategy, right?


#2

Yes. For a taxpayer to be placed in CNC, they must qualify for the status. Take a look at IRM 5.16.1 for further guidance.


#3

Yes. The only way to get there is by actually being in a hardship.


#4

I am very fortunate to have a fellow CPA who also specializes in IRS tax resolution work to “bounce” ideas off of. In fact, we ROUTINELY get together to exchange ideas.

CNC or “Currently Non Collectible” is an issue we have discussed and come to what we feel is a common sense strategy .

IF THERE IS ANYWAY AT ALL POSSIBLE, I TRY MY BEST TO KEEP MY CLIENTS OUT OF CNC…HERE IS WHY!

If the client’s financial situation turns around prior to the Statute running out, the IRS will come back and pursure collections. I had this happen on one of my very first cases that I ever worked.

So when I complete the 433-OIC, if there is any way possible, I look for any assets whatsoever (i.e personel belongs, cash on hand, etc.) that will allow me take make an offer to the IRS, no matter how minimal.

So far, so good!


#5

Hi, again. I have a question on this answer: Assume the client’s expenses exceed his income and thus is CNC. If the client has an asset (for example, money in a 401(k)), is that paid to IRS as part of the CNC process? Or can that asset be used as a partial pay installment agreement? I guess that the other possibility is to use the asset as an offer for an OIC.

Thank you for your help!


#6

Gary,

It was great talking with you today! I wanted to provide you with some follow up information by expanding on some information previously provided in this thread by Jeff McNeal.

IRM 5.16.1 Currently Not Collectible contains a ton of information regarding CNC. It is rather lengthy, however I have found it to be quite invaluable.

Thanks!

Keith