TAX PROBLEMS & HARDSHIPS SOLUTION BY THE PROFESSIONALS
If lacking the assets or income to pay off your tax debts immediately, sometimes the best approach to resolving the debt is to enter into an installment agreement, or payment plan. This can often be over a fixed amount of time until the balance is paid off, or also what the IRS considers a “partial payment plan,” where they agree you can only pay a portion of your total tax debt over the time period they have to collect under law.
A hardship status with the IRS is defined as Currently Not Collectible – Due to Hardship. This request must be based on full financial disclosure, and then you must prove based on assets and income available at present that making any monthly payment on your balance would put you in a situation of financial hardship. While your account is approved in Currently Not Collectible (or CNC) status with the IRS, your balance stays active and interest and penalties will continue to accrue. For balances > $10,000, the IRS often files a Notice of Federal Tax Lien to protect their interest in collection of your tax debt.