If you have a current Hardship, the IRS can suspend your tax debt today!

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If you are unable to pay your tax liability because of an economic hardship, the IRS will consider placing the account in a hardship or currently not collectible status. If the IRS is considering  your account for hardship they will look at your assets and monthly gross income against what the IRS calls allowable  living expenses. IRS monthly allowable expenses are national averages for food, clothing, miscellaneous expenses, housing, transportation, medical expenses and insurance, alimony, child support as well as proper tax withholding .  These allowable expenses can be found on our website on the homepage. Find the toolbar and click on IRS Forms. You will find the National Standard Expenses.

Hardship or currently not collectible is somewhat subjective.  Even though your monthly expenses may exceed IRS allowable amounts, it does not necessarily mean that such status is not warranted or sustainable. You may have excessive  expenses that the IRS is not aware because of a medical problem or because of a child or parent in your care.  In order to be consider currently not collectible( CNC),  you must provide the IRS with all financial information on Form 433-A or the 433-F.

Being placed in a hardship status is not  permanent. The IRS reviews these cases every 2 to 3 years.

The IRS will use the filing of your tax return and your AGI to determine when your case will head back out to the field for review again. Remember, this is just a temporary situation.  At some point you will have to deal with the situation to get it fully resolved. The IRS does not grant hardship all the time. Make sure you can fully document your case.

Most individuals who are in hardship status are good candidates for an Offer in Compromise.