How long does Currently Not Collectible status last?

The IRS says there is no fixed time period and that it may review the taxpayer's financial condition periodically. Under IRM 5.16.1.6, the IRS reviews a hardship account's total positive income each year when the taxpayer files an income tax return, and the account can be reactivated systemically when that income rises above an amount set by the closing code used to close it. In the manual's example, an account closed with allowable expenses of $22,000 is reissued when a return shows income of $28,000 or more.

What does the IRS look at to decide hardship?

IRM 5.16.1.2.9 says a hardship exists if a taxpayer is unable to pay reasonable basic living expenses, and that the determination generally rests on a Collection Information Statement. The IRS page lists Form 433-F, Form 433-A, and Form 433-B, and says the IRS may ask for documents to verify income, monthly living expenses, bank accounts, and property and other assets. The manual says an account should not be reported currently not collectible if enforced collection of the taxpayer's income or assets would not cause hardship.

Does Currently Not Collectible status affect a passport?

Yes, and in the taxpayer's favor when the status rests on hardship. IRM 5.16.1.2.9 says the IRS has exercised its discretion to exclude debts that are currently not collectible due to hardship from certification of seriously delinquent tax debt under section 7345, and that it will reverse a certification and notify the State Department within 30 days if a certified taxpayer is later determined to be currently not collectible due to hardship. The State Department generally will not issue or renew a passport after receiving a certification, and the IRS says the State Department may also deny an application or revoke a current passport.

IRS hardship status

Currently Not Collectible status with the IRS.

Currently Not Collectible status is an IRS account status; when the IRS places an account in it because of financial hardship, meaning the taxpayer is unable to pay reasonable basic living expenses, it temporarily suspends most collection activity. The debt is not forgiven: the full amount is still owed, and penalties and interest continue to accrue until the balance is paid in full.

Mr. Powell prepares the Collection Information Statement and the records behind a hardship request, and weighs that request against a payment plan or an offer in compromise, from 1629 K Street NW, Suite 300 in Washington, DC.

Internal Revenue Manual 5.16.1 (sections revised through March 3, 2025) and the IRS page on temporarily delaying collection were checked on IRS.gov on October 6, 2026. This page does not decide whether any taxpayer qualifies for the status.

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The hardship test.

The IRS says that if a taxpayer cannot pay because of financial hardship, it may place the account in Currently Not Collectible status, and may ask for financial information first to determine whether the taxpayer qualifies. Internal Revenue Manual 5.16.1.2.9 says a hardship exists if a taxpayer is unable to pay reasonable basic living expenses, and that these cases generally involve no income or assets, no equity in assets, or insufficient income to make any payment without causing hardship. It also says an account should not be reported currently not collectible if the taxpayer has income or equity in assets and enforced collection of the income or assets would not cause hardship.

The IRS may ask for Form 433-F, Form 433-A, or Form 433-B, and for documents that verify income, monthly living expenses, bank accounts, and property and other assets. The manual says a Collection Information Statement is generally secured before an account is reported currently not collectible, and that one is considered current if it is less than twelve months old. Under certain conditions, and only below a balance the published manual redacts, it allows a hardship closing without one, for example when the taxpayer is incarcerated or has a terminal illness or excessive medical bills; even then, employees must secure documentation from the taxpayer if the IRS's internal records do not confirm the circumstance.

The manual limits hardship closing codes to individual or joint assessments, sole proprietorships, partnerships where a general partner is personally liable, and limited liability companies where an individual owner is identified as the liable taxpayer. It notes that other closing codes cover accounts the IRS cannot collect for other reasons, such as inability to locate or contact the taxpayer.

Official source: IRM 5.16.1, Currently Not Collectible
Official source: IRS, Temporarily delay the collection process

While the account is in the status

What changes, and what does not.

Most collection stops
The IRS says it has temporarily suspended most collection activities on an account in Currently Not Collectible status. The Internal Revenue Manual says section 6343(e) requires the release of a levy on salary or wages upon agreement with the taxpayer that the tax is currently not collectible, and that if a hardship determination is verified, a levy cannot be issued or left in place to persuade a taxpayer to file.
The balance still grows
The IRS says the taxpayer still owes the full amount, which is not forgiven or cancelled, and that penalties and interest continue to accrue until the balance is paid in full. The Internal Revenue Manual says taxpayers must be advised that interest and penalties will continue to accrue even though collection is suspended, and that before an account is reported currently not collectible, other collection options such as an offer in compromise should be discussed.
A lien may be filed
The IRS says it may file a Notice of Federal Tax Lien to protect the government's interest in the taxpayer's property. The Internal Revenue Manual says that, in general, a notice should be filed when the account is reported currently not collectible and the aggregate unpaid balance of assessments equals or exceeds $10,000.
Refunds are applied
The IRS lists applying a federal tax refund to the tax debt among the things that may occur in the status, and its answer to whether it will take a refund says that if the taxpayer is due a federal tax refund, it will apply the refund to the unpaid tax debt.
Collection can resume
The IRS says it may review the taxpayer's financial situation later and may resume collection if the ability to pay improves.

Official source: IRS, Temporarily delay the collection process
Official source: IRM 5.16.1.2 and 5.16.1.2.9

Requesting the status, and the alternatives.

The IRS page says to request a temporary delay of collection by calling 800-829-1040 or the phone number on the bill or notice; those were the numbers it listed on October 6, 2026. It says a taxpayer who cannot pay in full and does not qualify for the status may qualify for a payment plan or an offer in compromise.

When a case is closed as currently not collectible because of hardship and the collection investigation is concluded, the manual says Case Closing Letter 4223, Case Closed, Currently Not Collectible, will be issued to the taxpayer, the taxpayer's power of attorney, or both.

Official source: IRS, Temporarily delay the collection process
Official source: IRM 5.16.1.2.9, Letter 4223

Questions

Common questions.

Does Currently Not Collectible status erase the tax debt?
No. The IRS says a taxpayer whose account is in Currently Not Collectible status still owes the full amount, and that the debt is not forgiven or cancelled. Penalties and interest continue to accrue until the balance is paid in full. The status is a temporary suspension of most collection activity, which the IRS may end if the taxpayer's ability to pay improves.
How long does Currently Not Collectible status last?
The IRS says there is no fixed time period and that it may review the taxpayer's financial condition periodically. Under IRM 5.16.1.6, the IRS reviews a hardship account's total positive income each year when the taxpayer files an income tax return, and the account can be reactivated systemically when that income rises above an amount set by the closing code used to close it. In the manual's example, an account closed with allowable expenses of $22,000 is reissued when a return shows income of $28,000 or more.
What does the IRS look at to decide hardship?
IRM 5.16.1.2.9 says a hardship exists if a taxpayer is unable to pay reasonable basic living expenses, and that the determination generally rests on a Collection Information Statement. The IRS page lists Form 433-F, Form 433-A, and Form 433-B, and says the IRS may ask for documents to verify income, monthly living expenses, bank accounts, and property and other assets. The manual says an account should not be reported currently not collectible if enforced collection of the taxpayer's income or assets would not cause hardship.
Does Currently Not Collectible status affect a passport?
Yes, and in the taxpayer's favor when the status rests on hardship. IRM 5.16.1.2.9 says the IRS has exercised its discretion to exclude debts that are currently not collectible due to hardship from certification of seriously delinquent tax debt under section 7345, and that it will reverse a certification and notify the State Department within 30 days if a certified taxpayer is later determined to be currently not collectible due to hardship. The State Department generally will not issue or renew a passport after receiving a certification, and the IRS says the State Department may also deny an application or revoke a current passport.

Official source: IRS, Temporarily delay the collection process
Official source: IRM 5.16.1.2.9 and 5.16.1.6

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The hardship test.

What changes, and what does not.

Most collection stops

The balance still grows

A lien may be filed

Refunds are applied

Collection can resume