Tax Terms

The tax representation industry uses a variety of tax terms that many people are unfamiliar with.  This landing page is intended to help you navigate the sometimes complex tax terms and acronyms that tax representation companies and taxing authorities use. 

Abatement of Penalties – When taxing authorities agree to remove monetary penalties from a tax balance.

Collection Statute Expiration Dates (CSED)The IRS and most states have a limited amount of time they can legally collect on a balance owed.  The Collection Statute Expiration Date, often abbreviated to CSED, is the last day in which the taxing authority can collect on a past due balance.

Currently Not Collectible Status (CNC) – A code the Internal Revenue Service uses to say that tax balances are still active and accruing penalties and interest, but the taxpayer cannot afford to have funds taken from them at this time, therefore no levies or garnishments will take place for the foreseeable future. This is sometimes abbreviated to “CNC Status”

Innocent Spouse – The IRS or State can determine that only one spouse is responsible for paying the taxes for a Married filing Joint debt, and removes the liability and obligation from the other individual listed on the original return.

Offer in Compromise – The IRS and most states have an Offer in Compromise program that tax representatives can use to settle a tax debt for substantially less than the taxpayer owes.

Substitute Tax Return – A tax return that the IRS has filed on the taxpayers behalf when repeated attempts to get the taxpayer to file a missing return have gone unanswered. Using information provided to the IRS by employers and third parties the IRS will create a return on the taxpayers behalf.