IRS Hardship

How to File for Hardship with the IRS and Uncollectible Status

To get some relief from the IRS for about six months or longer, you need to file for hardship and meet the requirements for such. You will need to submit detailed financial information about yourself with the IRS, so it can be determined if you qualify for status 53, or in other words, you are considered uncollectible. The granting of this status is not to be taken lightly because the IRS doesn’t just hand this out easily. The IRS must be convinced that you qualify as uncollectible, and it would create too much of a financial burden on your present situation if they were to enforce such a collection.

The tax collector in charge of your case can file this status 53 because only collectors or IRS officials are authorized to do so. You may be granted a reprieve to file additional paperwork if the tax collector is quite familiar with your financial constraints. But, the collector may have some difficulty filing this status for you unless the proper IRS forms have been filled out indicating this detailed financial information.

The forms that need to be filled out to file for hardship are 433-A for personal information and/or 433-B for businesses. Make sure your information are true and accurate. The “Collection Information Statement for Wage Earners and Self-Employed Individuals” is the title for form 433-A. Through this form, the IRS will get an idea of your collection potential. This could mean the difference of collecting from you straight away or giving you some time to get a hold of your financial standing.

Please check if you have some of these common documents on hand so that you can properly fill out the form and file for hardship. The IRS will need copies of these documents also:

  • Your Personal Information consisting of your SSN, dependents, phone, address, housing arrangements, and others.
  • Your Employment Information which details out your employer, pay stubs, work number, how long you’ve been employed, your occupation, and other pertinent information.
  • Your Other Income that comes from pensions, annuities, social security, child support, alimony, investment income, and other sources.
  • Your Bank and Financial Information which probably includes your checking account, liquid assets, investment accounts, credit card accounts, insurance policies, and other financial instruments.
  • Your participation in any legal proceedings
  • Your Copy of monthly bills (at least three months’ worth), which can include:
    • Food
    • Housing (Rent/Mortgage, Taxes, etc.)
    • Apparel and Services
    • Transportation Costs
    • Utility Costs
    • Personal Care
    • Medical Expenses

NOTE: If classified as disabled, please provide evidence through hospital bills or government records

  • Your Copies of last tax returns (IRS Form 1040, 1040A or 1040EZ)

It can be challenging to prove financial hardship, but if the requirements are in organized then it can be done. Please consult with a tax professional before attempting to file for uncollectible status on your own. This professional can tactically determine if declaring hardship is the best recourse for you. Your IRS problems will not disappear by merely being classified as currently not collectible. This is just an avenue for you to get on your feet so that you are able to settle your pending IRS account when you are able to do so in the near future.

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IRS Hardship

IRS Hardship FAQs

Q: Are there other names for IRS Hardship?

A: IRS Uncollectible Status, Status 53, Currently not collectible and CNC Status are some of the other terminologies. These all describe the status for IRS hardship.

Q: Can a CNC or Currently Not Collectible Extend the Statute of Limitations?

A: No. But, interest and penalties do continue to increase

Q: Can you give us an idea what the monthly amounts are for a 2-person household when someone is declared in IRS hardship status in 2018?

As of the time of writing, the IRS has not released the latest table for the Allowable Living  Expenses in the National Standards

But for local standards, these usually include monthly allotments for housing, utilities, and transportation operating costs by region. Local standards include expenses which are based upon where you live in the country. Housing and utilities are based at the county level, whereas car operation costs are based at the regional level.

Q: For common necessities, where can I find detailed amounts the IRS uses?

  • National Standards Food, Clothing and Other Items
  • National Standards: Out-of-Pocket Health Care Expenses
  • Local Standards: Housing and Utilities
  • Local Standards: Transportation

Q: What is the specific form to file for IRS Hardship?

A: There is not one specific form that can be used to file for hardship. You will need to coordinate with the IRS, so that you can be considered for this uncollectible status. To be considered as such, proof must be submitted that financial hardship would happen if the IRS were to collect from you. The IRS form 433-F should be filled out because this will provide them with detailed financial information about you. Monthly expenses also need to be indicated.

Q: Once declared currently not collectible, do I still have to pay the IRS?

A: Being declared uncollectible is a temporary status, so that means you still need to settle your accounts payable with the IRS. Your tax returns will still be monitored every two years. Sometimes a person on uncollectible status may retain such for a long period of time that the statute of limitation expires for that debt and legally that person may not have to settle it anymore.

Q: What are some other options to consider before trying to be declared uncollectible?

A: Other options need to be considered before trying to be declared uncollectible. A Currently Not Collectible Status or IRS hardship generally comes with a tax lien. Should you be able to make a minimum monthly payment toward the debt owed, then it is possible that you can qualify for this particular installment agreement. Your hardship status may be set aside once it can be determined that no financial constraints will prevent you from meeting the required payments with an installment arrangement. But, you may qualify for an Offer in Compromise if you are a potential candidate for IRS hardship. The taxes you owe can be settled for less with such an Offer in Compromise.

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