Owing Back Taxes: Do You Qualify For IRS Hardship Status?

What Are the IRS Rules for Qualification?

back taxes hardship Times are tough all over. The economy is struggling to make a come back. Our paychecks have less in them. People are having difficulty meeting their tax requirements. If you happen to be one of those who are struggling with tax debts, you need to act before your tax debts balloon out of control.

In some cases, you have the option of trying to prove to the IRS that your are undergoing a hardship. While we always suggest that you obtain professional assistance when dealing with tax resoltution matters, and in this case, there is no difference, to apply for hardship status, you need to fill out IRS form 433A. This form is used to compile information about the state of your finances, your total monthly expenses for an extremely long list of items including:

Food & Clothing
Housing & Utilities
Vehicle Ownership Costs (lease or ownership payments)
Vehicle Operating Costs
Health Insurance
Child/Dependent Care
Life Insurance

Also requested is the usual wages, other income, social security, banking information, credit history, etc.

Applying for hardship status isn't an easy process. Having professional tax assistance can help smooth the way with the IRS. Foreknowledge of the IRS rules can also assist you. The IRS sets the average amount for what is spent on basic items like food and clothing. The amount you spend on these basic items should fall below the national average.

Having assets that can be liquidated for ready cash will not help you. If you have such assets you should be paying off your tax debt, rather than applying for hardship status.

The IRS will also require proof that you are undergoing a hardship. You need to be able to show the IRS that you are really struggling. Providing some kind of relevant documentation to prove your case is required. Did you recently lose your job? Are you limited is some way that prevents you from gaining employment? Keeping a copy of your termination papers and documents proving your ill health can help.

Proving that you are undergoing a hardship is one of the more difficult ways to resolve issues with the IRS. If you are unsuccessful at obtaining hardship status, there are other options available to you. Seeking professional tax assistance to discuss your options when you first receive notices from the IRS is in your best interest. Tax Resolution professionals, like the specialists at The Tax Office, Inc. are highly educated and work with the IRS on a daily basis. They can work with you and the IRS to get the best possible outcome for you.