How to Qualify for IRS Hardship Status (CNC) in Orange County

Introduction

If you live in Orange County, CA, and owe the IRS more than you can afford to pay, you're not alone—and you're not out of options. One of the most powerful yet underutilized forms of tax relief is called Currently Not Collectible (CNC) status, also known as IRS hardship status.

CNC status allows qualifying taxpayers to pause all IRS collection activity—including wage garnishments, bank levies, and tax liens—if paying your tax debt would cause serious financial hardship.

At Boulanger CPA and Consulting PC, we help individuals and business owners in Anaheim, Orange, Garden Grove, and surrounding communities navigate the IRS hardship process and get the breathing room they need.

In this guide, we’ll explain what CNC status is, who qualifies, how to apply, and how to protect yourself while under IRS review.

What Is Currently Not Collectible (CNC) Status?

Currently Not Collectible (CNC) status is a temporary hardship designation by the IRS that pauses all collection activity—including wage garnishments, bank levies, and tax liens—if paying your tax debt would create a serious financial burden. It allows eligible taxpayers to avoid enforcement actions while remaining in compliance.

Your tax debt still exists, and penalties and interest may continue to accrue, but the IRS agrees that attempting to collect from you at this time would cause undue hardship. CNC is one of the most effective ways for taxpayers in Orange County, CA to get immediate relief when they cannot afford to pay the IRS.

Who Qualifies for IRS Hardship (CNC) Status?

To qualify for CNC, you must prove that paying your IRS debt would prevent you from meeting your basic living expenses.

The IRS uses a formula based on:

• Income vs. allowable expenses
• Asset equity (home, car, bank accounts)
• Household size and dependents
• Geographic location (Orange County costs can be factored in)

Common qualifiers include:

• Unemployed or underemployed individuals
• Low-income retirees or disabled persons
• Single parents living paycheck to paycheck
• Self-employed taxpayers with inconsistent income

We’ve helped countless clients in Orange County submit successful hardship cases based on these factors.

IRS Allowable Living Expenses (And Why They Matter)

The IRS doesn’t use your actual expenses—they use standard allowances for:

• Housing and utilities
• Food and clothing
• Transportation
• Out-of-pocket medical costs

If your income doesn’t cover these basic costs (even by their conservative standards), you likely qualify for CNC.

💡 Tip: Living in high-cost areas like Anaheim or Garden Grove can work in your favor—if properly documented.

How to Apply for Currently Not Collectible Status in Orange County

Here’s a step-by-step process we use at Boulanger CPA to help clients get into CNC status:

Step 1: Verify Compliance

Make sure all required tax returns are filed. You can’t request hardship status if you have missing returns.

Step 2: Gather Financial Documentation

You’ll need to provide detailed records of:

• Income (pay stubs, self-employment, benefits)
• Monthly expenses (rent, food, medical, etc.)
• Bank statements
• Asset details (home, vehicles, etc.)

Step 3: Complete IRS Form 433-A or 433-F

This is your financial disclosure form. Accuracy matters—a lot.

Step 4: Submit to the IRS

Depending on your situation, we may:

• Contact the IRS directly on your behalf
• Submit through the Automated Collection System (ACS)
• Request CNC during a Collection Due Process hearing

Step 5: Monitor IRS Response

Once approved, we receive written confirmation that your account is Currently Not Collectible, and all collection actions are halted.

What Happens After CNC Is Approved?

Once your account is in CNC status:

• Collections stop immediately
• Penalties and interest may continue to accrue
• The IRS may review your financials every 1–2 years
• If your income increases, your CNC status can be revoked

This is why we continue to monitor and support clients even after approval—to keep them protected.

CNC vs Offer in Compromise: Which Is Better?

CNC is a temporary pause in collections due to hardship. You still owe the full amount.

Offer in Compromise (OIC) is a settlement that reduces your total debt, but only if you qualify.

We often use CNC status as a stepping stone to an Offer in Compromise. It buys time to get compliant, build a case, and stabilize income.

What If the IRS Rejects Your Hardship Request?

Rejection doesn’t mean the end. It may just mean your financials need to be updated or clarified. We:

• File appeals if the IRS wrongly rejects CNC
• Re-submit updated financials
• Explore other solutions like payment plans or Offer in Compromise

Real Client Success Story – Orange County, CA

“I was living off Social Security and the IRS kept sending threatening letters. Boulanger CPA filed my financials and got me into CNC in under 30 days. No more stress, no more sleepless nights.” – Maria L.

Why Work with a Local Orange County CPA?

When it comes to IRS hardship status, the details matter. We’ve helped dozens of clients in Anaheim, Orange, and Garden Grove get protected from collections.

As your local tax resolution team, we:

• Understand California-specific cost of living allowances
• Know how to present hardship cases effectively
• Offer both virtual and in-person support
• Have direct IRS contact channels for fast response

Don’t trust a national call center with your financial future—choose a licensed CPA who lives and works in your community.

Call Now for a Free Hardship Status Evaluation

If you're overwhelmed by IRS tax debt and can’t pay, IRS hardship status (CNC) could stop collections and give you peace of mind.

📍 Serving Anaheim, Orange, Garden Grove, and all of Orange County
📞 Call Now: 657-218-5700
🌐 Schedule a Free Consultation: https://www.orangecounty.cpa

Let us help you pause the IRS and protect what matters most.

Frequently Asked Questions