To prove your tax difficulties to the IRS, you'll need to submit your financial information to the federal government. The IRS usually issues refunds within specific time frames. The IRS generally needs two weeks to process a refund on an electronically filed tax return and up to six weeks for a paper tax return. However, if you do not meet the requirements of a transaction offer, it would be best to apply for the status of a person with financial difficulties.
If you are an individual taxpayer and believe you are eligible for financial hardship status from the IRS, you can apply by completing Forms 433A or 433F. If you have a C corporation, an S corporation, or a partnership and you think you qualify for economic hardship status from the IRS, you can apply by completing Form 433B. 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. The IRS won't seize your property, keep your paycheck, or wipe out your bank account while you're in trouble with the IRS.
IRS Hardship will not eliminate back taxes. You will continue to owe back taxes. Each year, the IRS will mail you a reminder letter about the taxes due. 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.
However, if you're facing serious financial difficulties and need your refund right away, the IRS may consider not following its usual procedures for accepting the refund. As long as you have difficulties with the IRS, you'll be protected from IRS collection methods, such as seizing property, garnishing your paycheck, or collecting money directly from your bank account. The IRS will likely request documentation about your financial difficulties, such as copies of closing notices, eviction or foreclosure notices, etc. The IRS may be able to expedite your refund.
If you are delayed due to a temporary delay in processing, you may receive a letter or notification from the IRS informing you that there is a problem with your tax return or that your refund will be delayed. We will gather your financial statements along with the documentary evidence necessary to prove a case of financial or personal hardship before the IRS. If you owe taxes to the IRS from a previous tax year, the IRS may withhold your refund to settle that debt. If you owe back taxes and are unable to pay them because of your current economic situation, you may be eligible for difficult economic status from the IRS, technically known as a currently non-taxable state.
If you provide the information the IRS requests within the requested time frame, the IRS will immediately consider your request for an expedited refund. Form 433A or Form 433F: used for individuals or individuals who are self-employed who apply for a difficult economic situation with the IRS. The IRS financial hardship program is designed to help taxpayers who would not be able to cover their necessary living expenses if they had to pay their tax bills. If you're having trouble making ends meet and can't pay your taxes, you may be eligible for a difficult financial situation from the IRS.
