USA taxpayers struggling to pay their IRS tax debt may be wondering if they qualify for the IRS hardship program.
This program can provide much-needed relief for those who are struggling financially.
This article will discuss what the IRS hardship program is, who qualifies for it, and how it can help you pay your IRS debt.
IRS back tax assistance
The IRS is not a fan of persons who allow their back taxes to go unpaid. The IRS has proven this time and again, as it has taken action against numerous taxpayers to recoup what they were owed regardless of their filing status.
Don’t worry if you find yourself in a dispute with the IRS; there is still hope of salvaging the situation.
A federal IRS back tax assistance hardship program might help you when your back taxes is causing significant stress and discomfort on your finances.
What is an IRS Hardship Program?
The IRS offers several hardship programs to help individuals and businesses struggling to pay their taxes.
The most common hardship program is the Offer in Compromise. This program allows taxpayers to settle their tax debt for less than the total amount they owe.
The IRS also offers payment plans and installment agreements for taxpayers who can’t pay their taxes in full right away. And finally, there are several tax relief programs specifically designed for businesses.
The IRS hardship program may be discovered in Part 5 of the Internal Revenue Manual, Section 1 of Chapter 16 within Part 5.
The IRS has developed a provision for what is referred to as a Currently Not Collectable (CNC) status in this portion of the IRM. When it comes to their hardship program, stringent requirements assist the IRS in determining your eligibility.
Who Qualify for a tax hardship relief
The IRS will have to assess your condition before determining whether collecting the taxes you are responsible for would cause an undue hardship, which would jeopardize your ability to sustain yourself.
The IRS must have the following Collection Information Statement forms to make a decision about collecting any outstanding bills:
- Form 433-A and form 433-F. Both are used to collect information from self-employed individuals or those who earn wages.
- Form 433-B, used for collecting information from businesses.
These forms collect the following information:
- Whatever you own
- Bank accounts.
- Investment portfolios.
- Retirement savings.
- Vehicles.
- Real estate.
- Life insurance.
- Other assets that the IRS has determined to have a lot of value and can be utilized to pay your back taxes.
- The market value of each of your assets.
- List all of your profits for the previous three months.
- A report on your expenses over the previous three months
- A monthly income and expense overview broken down into categories, with a three-month average of your earnings and expenditures.
The IRS gets a lot of sensitive information from these Collection Information Statements. They demand you to disclose financial data that some people may find too personal.
The IRS has a few different hardship programs that you might qualify for. The most important consideration when deciding whether or not to apply for an IRS hardship program is if you can barely make ends meet and support your family.
IRS tax hardship program Qualifications
The following are the requirements in order to be eligible for an IRS hardship program: You must have a qualified tax professional who can lead you through the application process and answer all of your questions.
- You have an income of less than $84,000 per year.
- Once you’ve paid for your essential living expenses, you’re down to nothing.
- According to the IRS, your living expenses are acceptable:
- Personal care items, food, clothing, and other miscellaneous items are among the allowable living expenditures defined by the IRS.
- Out-of-pocket health care costs.
- The housing and associated costs.
- Transportation.
The CNC status is typically irrelevant for large businesses, and bankruptcy may be a viable option for firms with unpaid taxes.
CNC status applies to:
- Individuals.
- Sole proprietorships.
- Partnerships that have a personally liable general partner.
- LLCs that are individually owned are identifiable as liable for the taxes.
Additional Options for Settling Back Taxes With the IRS
If you believe the IRS hardship criteria go beyond what you are willing to reveal to the IRS, there are various alternatives for resolving back taxes with the IRS.
For example, you might consider the following::
IRS Payment Plan
An IRS payment plan or installment agreement is an agreement in which you pay a certain amount of money each month. The repayment method varies depending on the type of installment agreement you select, and it depends on whether the IRS approves your use of this method to repay taxes.
IRS Offer in Compromise (OIC)
An IRS Offer in Compromise (OIC). Although this option may be difficult to get approved by the IRS, it is not impossible. An OIC is a type of agreement between you and the IRS that allows for your outstanding taxes to be paid off for a lower amount than what you owe.
Need help with an IRS Hardship Program?
It’s always better to take action than to do nothing, regardless of the method you choose to balance family and tax debt.
The IRS is a highly zealous tax collector, and it can be tough to escape its clutches.
Call now to connect with a tax professional when facing the impossible odds of back taxes with the IRS.
