Sometimes taxpayers come across unforeseen financial events and it puts them in a situation where they are simply not able to pay the IRS the taxes that are owed. The IRS understands that this happens and has the power to declare an individual uncollectible if they can prove to the IRS that the collection of the tax would cause financial hardship. Once the IRS approves, then this will temporarily stop collections. The IRS will follow up several months later to see the financial situation has improved enough in order to start collections again. This status won’t solve your tax problem, but will buy you more time to deal with it.

To determine a financial hardship the IRS will request a complete financial statement from the taxpayer.  Using predetermined IRS standards based on number people claimed on the most recent income tax return, county of residence and other necessary expenses, the IRS will determine if you are eligible for currently non-collectible status.

Remember, currently non-collectible status is a temporary status.  The IRS maintains the right to reevaluate your income and expenses to determine if you are now capable of repaying your tax debts.  While you are in non-collectible status the IRS will intercept and income tax refund you are due and apply it to your outstanding balance.

Oftentimes, this is an excellent outcome for someone on a fixed income or possibly retired.

If you or a family member need is a possible IRS hardship case, contact the licensed tax experts at Patriot Tax Professionals.  You have the assurance that every single employees that handles your case is fully licensed and admitted to practice before the IRS.  Your tax case will be worked on by tax professionals with many years of experience in dealing with the IRS on cases similar to yours!

**For more information on IRS hardship cases, visit the IRS website at www.irs.gov