Can I file a Hardship with the IRS?

Author: Tax Resolution Attorney Gwin, PLLC |

Have you been unable to pay your tax due to tight financial conditions? Has the thought come to your mind - Can I file a Hardship with the IRS? Read on to know the answer.

Criteria to Qualify For Financial Hardship
You can file for the IRS hardship status if you are unable to pay taxes because you don't have enough money to cover your living expenses. To prove that you are facing financial hardship will require you to fill out a form which details your necessary living expenses. The IRS calls it - 'collection financial standards' (IRS form 433-A / form 433-B / form 433-F).

You will need to provide detailed financial information related to your employment, investments, bank account and credit card statements, monthly bills, etc. The IRS will deduct your monthly income from the monthly allowable living expenses, and if there is little or no disposable income left after deduction, you may qualify.  If you are facing financial difficulty in paying back taxes, contact Tax Resolution Attorney Gwin today!

What is the CNC Status?
Once you qualify, you will be granted a CNC status (Currently Not Collectible). It means that you will not have to worry about tax payments being deducted from your wages, having a bank levy, or tax liens on your property. You will still owe taxes, and penalties and interests will continue to be charged every year.

Your financial situation will be reviewed by the IRS every two years, and if it doesn't improve, before the expiration of the statute of limitations, the IRS will remove all back taxes, penalties, and interest. Your account will be cleared at the expiration of the Statute of Limitations.  When you qualify for financial hardship, new taxes are not included in the uncollectible status. You will still need to pay any new taxes for the following years. The IRS hardship program is different than an IRS settlement (offer in compromise) or an IRS installment agreement.

Contact Us
If you have tax debt and are facing financial difficulty in paying it, contact us for help. Tax resolution attorney Kelly J. Gwin has helped thousands of clients with their legal problems for over 19 years.