Owe Back Taxes – Cannot Afford to Pay – Hardship, Tax Settlements – Tax Relief Experts 1-866-700-1040
The key to disposing of your case rests in the hands of the 433F, the IRS financial statement.
If you owe back taxes to the Internal Revenue Service and you cannot pay your back tax debt and you need to apply for an IRS tax hardship or you want to consider a tax settlement contact us today because we are true certified tax relief experts.
We are professional tax firm comprised of tax attorneys, certified public accountants, and former IRS agents and managers.
We have over 206 years of professional tax experience and over 60 years of working directly for the Internal Revenue Service in the local, district, and regional offices of the Internal Revenue Service.
As former IRS agents we worked the IRS tax hardship program and the offer in compromise program which is also called the tax settlement program.
Next Step – Cannot pay or Tax Settlements
If you owe back taxes to the Internal Revenue Service and you cannot afford to pay or want apply for an IRS tax hardship or tax settlement, IRS will require a current financial statement form 433F. You can find this form on our website.
The Internal Revenue Service financial statement will have to be completed in its entirety. It is a simple two-page form. The IRS will require all the documentation and substantiation to prove the correctness and accuracy of the financial statement along with all bills and receipts. IRS will want copies of your last 3 to 6 months bank statements and your last pay stub.
IRS will make a Decision which status – Cannot afford to pay, Installment Agreement or Tax Settlement
IRS will then render a decision on which of three categories you may apply for.
As a general rule, the Internal Revenue Service or either put you into an economic tax hardship which is also called a currently not collectible file, they will advise you that you can make a current installment agreement or recommend you for an IRS tax settlement called in offer in compromise or tax settlement.
Advice to the taxpayer
Taxpayers should not give financial statements to the Internal Revenue Service unless they are fully reviewed by a certified tax professional.
As a former IRS agent I can tell you firsthand that taxpayers can do themselves more harm than good. What most taxpayers do not understand is there a is a national and regional standards test that IRS uses and that changes the results of all financial statements. Basically the Internal Revenue Service may not allow all your expenses leaving you a hefty installment payment.
Many cases that we get at fresh start tax finds that taxpayers have called the IRS on their own and IRS acted unreasonably in a rational and making their decision.
Contact us for free tax evaluation to explain the national and regional standards program.
IRS Tax Hardships Code Sections
IRS does not publicize this a lot however within the code there is a section that deals with tax hardships – 5.16.1.2.9 (05-22-2012)
Hardship
IRS follows 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 taxpayers accounts should not be reported as CNC if the taxpayer has income or equity in assets, and enforced collection of the income or assets would not cause hardship.
National and Regional Standards
The standard amounts set forth in the national and local guidelines are designed to account for basic living expenses. In some cases, based on a taxpayer’s individual facts and circumstances, it will be appropriate to deviate from the standard amount when failure to do so will cause the taxpayer economic hardship.
The taxpayer must provide reasonable substantiation of all expenses claimed that exceed the standard amount.
Please Note:
Substantiation can consist of credible verbal communication or written documentation received from the taxpayer.
Both types of substantiation should be thoroughly documented in the case history.
Example of Substantiation :
Taxpayer’s income dropped significantly from the prior year and taxpayer explains that he went though a divorce and is no longer claiming two incomes.
Verbal substantiation supporting the drop in income should be documented in the case history.
IRS will check:
a. Bank statements or canceled checks
b. Credit card vouchers
c. Rent/lease receipts and lease agreements
d. Payment coupons
e.Court orders
f. Contracts
g. Future expenses, e.g., the birth of a child or the necessary replacement of a car that will increase expenses
h. credit reports
i. IRS will probable Google your name as well to check for assets.
In summary just remember that IRS will thoroughly check and review your current financial statement to determine which of the categories you will be eligible for.
Contact us today for free financial consultation and speak directly to former IRS agents and managers who are experts in owing back taxes and those who cannot afford to pay the IRS because of a current tax hardship.
