Do not be afraid to ask the IRS to put your case into Hardship or a Currently Non Collectable Status.
As a former IRS Agent, 50% of the cases I worked, I had to write off as currently not collectible because the taxpayers simply had no money at the current time to pay the tax and for that matter, even make a small payment to the IRS. Most of these taxpayers were broke.
Since the case was in my inventory it had to be closed and put back into the system. Accounts are generally full paid, put in part pay status or placed in to a Hardship Status.
IRS does not advertise to the public that your case can be put into a current IRS hardship.
There are about 10 million cases right now in the IRS collection system that are deemed IRS tax hardships. They can stay in hardship for 1 year or stay there until the collection statute expires on the case. For more insight into how long cases stay in the closed computer system you can contact me directly.
So what is a IRS TAX HARDSHIP?
Many people have absolutely know idea that hardship or currently uncollectable exists. The truth of the matter is that most of our clients fall into the hardship rules.
Under the Internal Revenue Service IRS 22.214.171.124.9 (04-29-2011) explains the hardship provisions.
Follow the procedures in IRM 5.15.1, Financial Analysis Handbook, to determine the correct resolution of the case based on the taxpayer’s assets and equity, income and expenses:
A hardship exists if a taxpayer is unable to pay reasonable basic living expenses.
The basis for a hardship determination is from information about the taxpayer’s financial condition provided on Form 433–A, Collection Information Statement for Wage Earners and Self-Employed Individuals or Form 433–B, Collection Information Statement for Businesses.
Generally, these cases involve no income or assets, no equity in assets or insufficient income to make any payment without causing hardship.
Generally, an account should not be reported as Currently Not Collectable if the taxpayer has income or equity in assets, and enforced collection of the income or assets would not cause hardship.
Other reasons for IRS hardships:
The taxpayer has a terminal illness or excessive medical bills.
The taxpayer is incarcerated.
The taxpayer’s only source of income is social security, welfare, or unemployment.
The taxpayer is unemployed with no source of income.
For accounts where the aggregate unpaid balance of assessments is above $10,000 the following additional verification is required:
Full credit report on IMF and sole proprietor taxpayers and LLCs (where an individual owner is identified as the liable taxpayer)
Motor vehicle records
Real and personal property courthouse records.
On-line locator services, such as Accurint, follow security guidelines when using public internet search engines
Should you think you qualify for hardship, call us today.