IRS Hardship Program: A possible relief if you owe back taxes to the IRS

The IRS Hardship program, also known as the Currently Not Collectible (CNC) status, is a program that allows taxpayers who are experiencing financial hardship to postpone paying their taxes. If you are approved for CNC status, the IRS will not take any collection action against you, such as garnishing your wages or seizing your assets, until your financial situation improves.

Potential benefits to the IRS Hardship program

    • Relief from collection action: As mentioned, if you are approved for CNC status, the IRS will not take any collection action against you. This can provide much-needed relief if you are struggling to pay your taxes and are being harassed by the IRS.
    • Time to pay: If you are approved for CNC status, you will have time to pay your taxes when your financial situation improves. This can be especially helpful if you are going through a temporary financial setback, such as a job loss or a medical emergency.
    • Interest and penalties may be reduced: If you are approved for CNC status, the IRS may agree to reduce or suspend the interest and penalties that have accumulated on your taxes. This can help to lower the overall amount that you owe.
    • Avoiding tax liens and levies: If you are approved for CNC status, the IRS will not file a tax lien or levy against you. A tax lien is a legal claim against your property to secure payment of your taxes, while a levy is the actual seizure of your property to satisfy your tax debt.
    • It’s important to note that the IRS Hardship program is not a permanent solution. If your financial situation improves, you will be expected to resume paying your taxes. Additionally, the IRS may review your case periodically to ensure that you are still experiencing financial hardship.

How can I get approved for CNC status by the IRS

To apply for Currently Not Collectible (CNC) status with the IRS, you will need to provide financial information to demonstrate that you are unable to pay your taxes. You will also need to provide information about your income, expenses, and assets.

Here are the steps to apply for CNC status:

    1. Gather your financial information: You will need to provide detailed information about your income, expenses, and assets. This includes information about your employment, any business income or expenses, your monthly bills and expenses, and any assets you own, such as a home or car.
    2. Complete Form 433-F: This is the Collection Information Statement for Wage Earners and Self-Employed Individuals. This form is used by the IRS to gather information about your financial situation. You can download Form 433-F from the IRS website or request a copy by calling the IRS.
    3. Submit your financial information to the IRS: You can submit your financial information to the IRS by mail, fax, or online through the IRS’s e-Services portal. Make sure to include a completed Form 433-F and any other supporting documentation.
    4. Wait for a response from the IRS: It may take several weeks or months for the IRS to review your financial information and make a decision on your CNC status. The IRS may also request additional information or documentation before making a decision.
    5. If you are approved for CNC status, the IRS will send you a letter stating that your case has been placed in CNC status. If you are not approved, the IRS will continue to pursue collection action against you. If you disagree with the IRS’s decision, you can appeal the decision through the IRS’s appeals process.

Are there tax relief companies that I can seek help from to get CNC status approved?

Yes, there are companies that specialize in providing tax relief services to individuals and businesses who are struggling to pay their taxes. These companies may be able to help you apply for Currently Not Collectible (CNC) status with the IRS or negotiate a payment plan or offer in compromise.

It’s important to be careful when choosing a tax relief company, as some companies may not be legitimate or may charge high fees for their services.

Here are a few things to consider when choosing a tax relief company:

    1. Research the company: Check the company’s reputation by reading online reviews and checking with the Better Business Bureau.
    2. Look for a company that is transparent about its fees: Choose a company that is upfront about its fees and does not require you to pay a large upfront fee.
    3. Make sure the company is legitimate: Avoid companies that make unrealistic promises or guarantee that they can reduce your tax debt.
    4. Make sure the company has access to tax experts, such as an enrolled agent or a tax attorney in-house.
    5. It’s generally a good idea to get a consultation before hiring a tax relief company. You may want to all the questions answered, to get advice on the best course of action for your situation.

What questions to ask before hiring a tax relief expert services

If you are considering hiring a tax relief expert, it’s important to do your due diligence to ensure that you are working with a reputable and competent professional. Here are a few questions you may want to ask before hiring a tax relief expert:

    1. What is your background and experience in tax relief? Look for a professional who has relevant experience and credentials, such as an enrolled agent or a tax attorney.
    2. How do you charge for your services? Look for a professional who is upfront about their fees and does not require you to pay a large upfront fee.
    3. Can you provide references from past clients? Ask for references from past clients to get an idea of the professional’s track record. Check testimonials online. These are from legitimate clients that have used the services from this company in the past.
    4. What is your success rate in negotiating with the IRS? Look for a professional who has a proven track record of successfully negotiating with the IRS.
    5. Do you have any specialties or areas of expertise? Consider hiring a professional who has specific expertise in your area of need, such as negotiating an offer in compromise or applying for Currently Not Collectible (CNC) status.
    6. What is your policy on communication and availability? Look for a professional who is responsive and available to answer your questions and provide updates on your case.
    7. What is your policy on confidentiality? Choose a professional who is committed to protecting your privacy and keeping your information confidential.

At FinishLine Tax solutions, our experts have been helping individuals with special tax situations nationwide and can help you with your tax problem. FinishLine ranked #1304 on Inc. Magazine‘s 2022 Inc. 5000, a prestigious list of the nation’s fastest-growing private companies.