If you have an unpaid tax balance and can't afford basic living expenses, you may qualify for one of the IRS's hardship payment alternatives. To determine if you qualify, the IRS will ask you to provide detailed financial information by completing a form 433-F or 433-A, called a Tax Information Statement. An economic difficulty occurs when we have determined that the tax prevents you from covering your basic and reasonable living expenses. For the IRS to determine if a lien is causing economic hardship, it will generally need you to provide us with financial information, so be prepared to provide it to you when you call.
If you owe taxes but can't pay them because you have enough money to support yourself and your family, you can apply for hardship compensation from the IRS. If you are unable to pay the new taxes, you can request that the new taxes go into economic difficulties from the IRS, although it will be more difficult to do so if you continue to owe new taxes. If you have some taxes included in the IRS economic hardship program, but you want to pay current taxes, there are options. Form 433A or Form 433F: Used for individuals or individuals who are self-employed who request an economic hardship situation from the IRS.
The difficult economic situation may stop tax collection activity during certain tax years in which the taxpayer has an obligation, but the IRS does not grant this condition lightly. If you have been working with an IRS representative, you can ask the IRS to mark “situation 53” on your file or request to be told that it is currently not taxable. Form 433B: Used for C corporations, S corporations, and companies that apply for a difficult economic situation with the IRS. The IRS examines your assets and, if there is no capital in them or if garnishing them to pay your tax obligations creates financial difficulties, you are more likely to get into a difficult economic situation.
So, as long as you're participating in the IRS economic hardship program, it's a good idea to develop a tax relief plan. You must convince the IRS that you can't pay and that forced collection would cause serious financial difficulties. You may qualify for the IRS economic hardship program if you can't pay taxes after paying basic living expenses.