FTB Hardship Deferral vs IRS Currently Not Collectible (CNC)
You Can Pause Collections — But Only If You Apply Correctly
If you're facing aggressive tax collections from the IRS or California Franchise Tax Board (FTB) but truly can’t afford to pay, you may qualify for one of two underutilized—but powerful—programs:
- IRS Currently Not Collectible (CNC)
- FTB Hardship Deferral
Both stop garnishments and levies—but they’re not equal.
This guide compares both programs and shows Orange County taxpayers how to pause collections legally and safely.
What Is IRS Currently Not Collectible (CNC)?
CNC means the IRS acknowledges your inability to pay and temporarily halts enforcement.
- No garnishments
- No levies
- No required monthly payments
- Interest/penalties continue
- Reviewed annually
Requires full financial disclosure using IRS Form 433-A or 433-F.
What Is California FTB Hardship Deferral?
California’s version of CNC, but less structured and more difficult to secure.
- Stops levies/garnishments temporarily
- Requires hardship documentation
- May require a hardship letter or CPA submission
- Can be shorter in duration than IRS CNC
- Reviewed less predictably
👉 How the FTB Evaluates Your Ability to Pay
Side-by-Side Comparison
| Feature | IRS CNC | FTB HArdship Deferral |
|---|---|---|
| Stops Collections | ✅ Yes | ✅ Yes |
| Payments Required | ❌ No | ❌ No |
| Interest Accrues | ✅ Yes | ✅ Yes |
| Annual Review | ✅ Yes | ❌ Not always |
| Process | Formal via Form 433-A/F | Less formal, more variable |
| Easier to Get? | Moderate | Harder |
Who Qualifies?
- Income barely covers living expenses
- No significant assets
- May be elderly, disabled, medically impacted, or unemployed
- In compliance with filings
Documents You’ll Need
- Income proof (paystubs, Social Security, etc.)
- Expense breakdowns (rent, medical, car, food)
- Asset listings
- For FTB: Hardship letter, supporting bank statements
- For IRS: IRS Form 433-A or 433-F
What Happens Next?
- If approved, collections stop
- The debt remains
- You must maintain compliance (file returns, avoid new debt)
- If financial situation improves, collections may resume
How Boulanger CPA Helps
We help clients in Anaheim, Santa Ana, Irvine, Fullerton, and across Orange County:
- Apply for FTB or IRS hardship relief
- Stop wage garnishments and bank levies
- File back tax returns
- Transition from hardship to settlement (Offer in Compromise)
📞 Call
657-218-5700
🌐
www.orangecounty.cpa
Frequently Asked Questions
Is FTB hardship status the same as IRS Currently Not Collectible (CNC)?
Not exactly. Both stop enforced collections, but the IRS uses the term "Currently Not Collectible" (CNC), while the FTB uses "financial hardship status." Each agency has its own criteria and process.
How do I qualify for FTB hardship status?
You must demonstrate that paying your tax debt would prevent you from meeting basic living expenses. The FTB requires detailed financial disclosures and may request updates annually or semiannually.
How long does hardship status last?
It varies. The FTB typically reviews hardship cases every 6–12 months. If your financial situation improves, collections may resume. You must stay in compliance to maintain the status.
Does CNC status with the IRS cover FTB balances too?
No. Each agency reviews your case separately. Being granted CNC status by the IRS does not automatically qualify you for California hardship relief—you must apply separately with the FTB.
Should I hire a CPA to request hardship or CNC status?
Yes. A CPA can prepare accurate financial statements, ensure your request is supported by the correct documentation, and coordinate submissions with both the IRS and FTB for the best protection available.
📣 About the Author
Marc Boulanger, CPA is the founder of Boulanger CPA and Consulting PC, a boutique tax resolution firm based in Orange County, California and trusted by high-income individuals and business owners across Southern California.
He is the author of Defend What’s Yours: A California Taxpayer’s Guide to Beating the IRS and FTB at Their Own Game, available now on Amazon. The book offers a step-by-step plan for resolving IRS and FTB tax debt without losing your business, your home, or your peace of mind.
With over a decade of experience resolving high-stakes IRS and State tax matters, Marc brings strategic insight to complex cases involving wage garnishments, bank levies, unfiled returns, and six-figure tax debts. He is known for helping clients reduce or eliminate tax liabilities through expertly negotiated settlements and compliance plans.
Marc is a Certified Public Accountant licensed in California and Oklahoma and holds the designation of Certified Tax Representation Consultant. He is a member of the American Society of Tax Problem Solvers (ASTPS) — the national organization founded by the educators and practitioners who have trained thousands of CPAs, EAs, and tax attorneys in IRS representation strategy.
Every case is handled with discretion, proven methodology, and direct CPA-led representation — not call center scripts.
📍 Learn more at www.orangecounty.cpa or call (657) 218-5700.
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