Unemployment rates are at record highs. Many taxpayers simply cannot afford to pay their Tax Debt obligations. However, there is a variety of options available for taxpayers that simply cannot afford to pay.
Currently Uncollectible or Hardship status is granted to people who cannot afford to pay their IRS tax debt without sacrificing Basic Needs.
The IRS will compare your monthly gross income versus what they consider your "allowable expenses" to determine if you qualify for this program. If you qualify, collection efforts may be extended.
Basic Needs: These include food, housing, clothing, transportation, medical expenses, and insurance. Luxury expenses do not count, not even private school tuition for your children.
Allowable expenses Applying to One Person:
• Food: $227
• Housekeeping Supplies: $28
• Apparel & services: $85
• Personal care products & services: $30
• Miscellaneous: $87
Partial Payment Agreement
With a Partial Payment Installment Agreements you can pay less than the full amount of the tax debt. To apply you must:
- Fill out Form 9465, Installment Agreement Request.
- Fill out Form 433-A, “Collection Information Statement”
- Mail this information to the IRS, along with a letter request a Partial
Other Installment Agreements
There are many kinds of Installment Agreements. Some require financial disclosure and some do not. If you owe more than $10,000, the IRS will attempt to pressure you into an unaffordable payment plan. Defaulting on a payment plan can lead to pretty serious circumstances. This is why it is best to talk to a tax debt professional to make sure your payment plan works best for your situation.
Signs of the Times
The IRS issued a press releases and statements assuring taxpayers that they were going to go easier on taxpayers that owe money, but they have not held true to the sentiment. The IRS collection budget increases every year. If you owe, you have to find any way possible to pay or resolve the Tax issue.