If you have an unpaid tax balance and can't afford basic living expenses, you may qualify for one of the IRS's hardship payment alternatives. To determine if you qualify, the IRS will ask you to provide detailed financial information by completing a Form 433-F or 433-A, called a Tax Information Statement. You can start the process of filing an application for financial difficulties by completing the appropriate forms. The IRS forms you'll need to fill out are on the IRS website.
If you file a personal obligation, you will be required to complete and submit IRS Form 433-A. If you're filing this request for a business tax debt, you'll need to complete IRS Form 433-B. To obtain the status of a person with financial difficulties, you must meet certain criteria. The IRS will conduct a financial assessment requiring you to disclose your monthly income and living expenses, as well as the value of your assets and liabilities.
You must convince the IRS that you can't pay and that forced collection would cause serious financial difficulties. You can file a lawsuit for financial difficulties and, possibly, be granted a suspension of this obligation, even temporarily, by following these steps and hiring a tax professional to guide you through the process. The difficult economic situation may stop tax collection activity during certain tax years in which the taxpayer has an obligation, but the IRS does not grant this situation lightly. All of this information could help the IRS determine that you cannot satisfactorily pay your tax debt every month and that, in doing so, you and your family would experience excessive financial difficulties.
As long as you have difficulties with the IRS, you will be protected from IRS collection methods, such as seizing property, seizing your paycheck, or collecting money directly from your bank account. If you owe back taxes and are unable to pay them because of your current economic situation, you may be eligible for the IRS to grant you hardship status, technically known as a “current non-taxable situation”. In other words, the CNC IRS difficulties are generally not aimed at most large companies, but rather at individual taxpayers and small business owners. If they find an increase in their income and believe that it is within their means to pay their taxes, they will eliminate the CNC status and revoke the IRS difficulties.
If you are an individual taxpayer and believe you qualify for financial hardship status from the IRS, you can apply by completing Form 433A or 433F. The IRS will review taxpayer information every two years to make sure they still qualify for tax difficulties. If you can't pay your tax bill because you only have enough money to survive after supporting your family, you may be able to qualify for IRS hardship. We will gather your financial statements along with the documentary evidence necessary to demonstrate to the IRS a case of financial or personal hardship.
When you want to file a lawsuit for financial difficulties, you must understand the process that the IRS requires of people like you who have a tax debt to the government. Because the IRS program for people with economic difficulties requires the release of very sensitive financial records, some taxpayers get tired of filing an informational statement about collection and instead opt for an online payment agreement. IRS rules on economic hardship state that CNC codes can only be used for “individual or joint IMF assessments,” sole proprietorships, partnerships where a general partner is personally liable, and limited liability companies where an individual owner is identified as a responsible taxpayer. Many taxpayers are unaware of the IRS procedures for difficult situations introduced by the IRS tax hardship program and the opportunities it creates for people experiencing tax difficulties.