Requirements to Be Considered IRS Financial Hardship
By: Sally Pratt | Posted: 22nd November 2010
To be declared uncollectible by the IRS you will need to prove one thing: if they are to collect the money that is owed, it would create an unfair financial hardship. Although this may sound simple on the surface, keep in mind that the IRS has its own system for determining whether or not your account should be considered uncollectible. Each person who applies for this status is considered on a case by case basis. What works for somebody else may not work for you. The IRS does not have a formula for determining this status because there are so many factors that go into the equation.
Of course, there are some details that the IRS looks at regardless of who is applying. Below are some of the questions that they will be looking to answer as they take a closer look at your case. If the IRS decides to collect from you, would it be possible to: provide food on a regular basis? Pay your rent or mortgage? Maintain the utilities necessary to lead a normal life? Keep your job? Find transportation to and from your place of work? Get medical help should you need it?
Can you honestly answer no to any of the questions detailed above? If so, you have a very good chance of the IRS considering your account uncollectible. This is just the first step in proving your financial hardship.
Note: a small percentage of people qualify for uncollectible status. It is a good idea to keep all your options open. If you don’t and are turned down, you will find yourself in an even worse position.
Because some people get more confused when thinking about financial hardships, they often back down from pursuing this option. While it may not work out for you in the long run, you deserve to find out if this is an option. The longer you wait, the more complex your situation is going to get. Rather than hope that things work out on their own, contact a tax professional that knows a thing or two about financial hardships and uncollectible status. This will give you the ability to talk with somebody in the know, while also asking difficult questions. Even if you find that you are not going to qualify, it is better to know sooner rather than later so that you do not waste too much time trying to prove to the IRS that collecting would cause extreme financial hardship.
Since there are no “solid” requirements to being considered for financial hardship, you need to do what you can do prove this situation to the IRS. If you know what you are doing, go at it alone. But if you need any help, don’t hold back from hiring an experienced tax professional. The more you know about the requirements to be considered a financial hardship the better chance there is that you will find a solution to your tax problem.
Find more information on how to resolve an IRS hardship that at TaxRelief.net.
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Tags: money, good chance, job, irs, closer look, mortgage, financial hardship, financial hardships, tax professional, medical help, case basis