IRS Can Reverse 'Currently Not Collectible' Status, Experts Warn

Clear Start Tax explains what can trigger a return to active collections

Published on Feb. 11, 2026

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According to tax resolution specialists at Clear Start Tax, the Internal Revenue Service can reverse a taxpayer's 'Currently Not Collectible' (CNC) status - often without much warning - sending accounts back into active collections. Clear Start Tax warns that many taxpayers mistakenly assume CNC status is permanent, when in reality it is subject to regular IRS review.

Why it matters

CNC status is typically granted when a taxpayer demonstrates financial hardship and an inability to pay. While it temporarily halts enforcement actions such as levies or garnishments, it does not eliminate the debt. The reversal of CNC status can come as a shock to taxpayers who believed their case was essentially closed.

The details

Common triggers for reversing CNC status include an increase in income, receipt of large sums such as bonuses or inheritance, newly filed tax returns showing improved finances, or failure to stay compliant with ongoing filing requirements. In some cases, IRS reviews alone - conducted every one to two years - can result in a status change even if the taxpayer did not initiate contact.

  • CNC status is subject to regular IRS review, typically conducted every 1-2 years.

The players

Clear Start Tax

A national tax resolution firm that helps individuals and businesses address IRS and state tax debt.

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What they’re saying

“Currently Not Collectible status is more like a pause button than a resolution. The IRS continues monitoring income, bank activity, and filing compliance. If anything changes-or if required returns aren't filed-the IRS can reactivate collections.”

— Clear Start Tax spokesperson (digitalmedianet.com)

“When CNC status is lifted, taxpayers may suddenly face bank levies, wage garnishments, or renewed collection notices. That's often a shock for people who believed their case was essentially closed.”

— Clear Start Tax spokesperson (digitalmedianet.com)

What’s next

Taxpayers can find out if they're eligible for the IRS Fresh Start Program and take the first step toward resolving their tax debt by answering a few simple questions.

The takeaway

Taxpayers need to understand that CNC status is not a permanent solution and that the IRS continues to monitor their financial situation and compliance. Proactive planning, continued compliance, and periodic review of one's IRS account are critical to avoiding unexpected enforcement actions.