Many struggling expats who sell an investment property ask me whether it is possible to enter Currently Not Collectible (CNC) status...

Many struggling expats who sell an investment property ask me whether it is possible to enter Currently Not Collectible (CNC) status and simply let the IRS 10-year Collection Statute Expiration Date (CSED) run out.

The answer, in real life, is usually yes.

The tax code allows the IRS to suspend the 10-year statute for time spent abroad. But the IRS system does not apply that suspension automatically. 

It requires a manual override by an IRS employee, and that override is almost never applied. 

Because of this, expat transcripts almost always show a normal 10-year CSED with no added time, even when the person has lived overseas for many years.

In my practice I regularly see expat tax debts expire right on schedule. The transcript flips to “Statute Expired” and the IRS cancels the debt. 

Reopening a case later is technically possible but extremely rare. And if it did happen, a taxpayer who still qualifies can usually remain in CNC or reapply without much difficulty.

CNC itself is also far more stable than people imagine. 

The IRS is supposed to review CNC status every two years, but in practice these reviews almost never occur for expats or even domestic cases. Most CNC accounts simply sit untouched until the statute expires.

Taxpayers should be aware that there is a small risk the IRS could look into the case later, but in my opinion the strategy is still well worth trying for those who genuinely cannot pay.

For expats dealing with real financial pressure, the combination of CNC and the 10-year expiration can be a practical path to relief.

The bottom line: the law technically allows the IRS to suspend the statute, but the system almost never applies it. 

As a result, many expat debts quietly expire at the 10-year mark, with CNC remaining stable throughout.

Although the debt may never have really "expired" by law and could in reality be reinstated, the chance of this is miniscule.

This is just one example of a loophole that almost no expats, and not even many tax professionals know about.