It’s a hard time to be a working-class American. Despite economic gains on a macro level, most American families are still living paycheck to paycheck. This financial hardship can rear its ugly head all through the year but can be especially difficult to face around tax time. The IRS hardship process can be your answer.
If you can’t afford to pay your taxes, you legally cannot ignore their request for money. So what can you do? You can file an IRS hardship form.
This form informs the IRS of your financial hardship and may allow you to be granted a reprieve from your tax responsibility. Interested in hearing more? Read on for everything you need to know.
The IRS Hardship Form
There’s a lot to know about filing for financial hardship with the IRS. But the easiest place to start is in talking about the form itself.
If you are filling out a form for your personal taxes, you’ll need to look on the IRS website for a form 433-A. If you are filing on behalf of a business, you’ll be looking for 433-B.
The first part of the form will ask for a large number of identifying details about yourself. This includes your social security number, your address and phone number, and information about the makeup of your household, in terms of dependents and family.
You’ll also need to provide a good deal of information about your employment. You’ll want to include information about your place of work, your salary or pay scale, and even include your most recent pay stub. Why? The IRS uses your employment information as a big deciding factor in determining if an applicant will be approved for relief.
In addition to the above, the IRS might also request information about your other expenses. They might ask for a copy of your bank statement, your rent, and any personal expenses you think may be relevant to your current financial situation.
For example, if you’ve recently faced high medical expenses due to an illness or serious injury, you should absolutely file evidence of such expenses. This kind of evidence can help make the case for why you are deserving of relief in the eyes of the IRS.
Regardless of if such an incident has occurred, you should provide the IRS with as much information about your monthly expenses as possible. This can help ensure that the agency has the full view of the financial hardships that you face.
Previous Tax Return
In order to process your request, the IRS will also need you to submit a copy of your tax return from the previous year. If you have missing returns in your past, you may be ineligible to receive tax relief.
It is highly recommended that you make a copy of your previous tax return and send the copy. The IRS does not need the original version of your tax return to process your request, and you always want to keep that on hand in case you need it for reference.
All of this information can be submitted alongside your IRS form. If you are working with an IRS agent, you can submit such files directly to them.
Understanding The Challenges
If you hope to obtain relief from the IRS, you should be aware of the challenge ahead of you. The agency does not grant such reprieves very often, and one must make an exceptionally strong case in order to convince them.
Even when you have no liquid cash available, the IRS may look at and consider seizing assets such as your vehicle in order to pay your debt. It’s worth saying again: it can be very difficult to obtain relief due to financial hardship.
As such, it’s highly advisable to hire a professional tax attorney who can help to create and present your case to the IRS. A tax professional has a great deal of experience presenting such matters to the IRS and can help to ensure your own case is brought forth in the proper light.
There are a lot of detailed and complicated procedures that must be followed when applying for financial hardship. A tax attorney can help to make sure you make no fatal mistakes when submitting your application.
If you do successfully obtain relief from the IRS, they will send you prod in a letter known as CNC. In this case, CNC stands for Currently Not Collectible. Once you receive this letter, you can rest easier knowing that you are not currently on the line for your tax burden.
Ifs important to remember that this relief is temporary. The letter you’ve been sent includes “currently” for a reason. The IRS will still want to see that money one day, but for now, they’ll allow time for you to get back on your feet.
While it can be very difficult to get this sort of result from the IRS, it certainly isn’t impossible. It all depends on how your case is presented and put together.
The IRS Hardship Form
Filing for financial hardship begins with filling out the IRS hardship form. From there, you’ll need to make your case to the agency as best as possible. With a little bit of work and luck, you might be able to get the help you need.
Need assistance in putting together your case? Give us a call anytime.