There are a lot of terms that get thrown around about the IRS and taxes. Hardship status is one such term. You may have heard it referred to as: IRS Uncollectible Status, Status 53, Currently not collectible, and CNC Status. But what do those words mean?
Hardship status means that if the IRS collected the taxes you owe, it would create an unfair economic hardship. Hardship means if they collected the money, you might be unable to feed yourself or your family. You may be unable to pay for necessary medical treatments, pay your mortgage or rent, pay for your utilities, keep any educational opportunities you may have, and get back and forth to work.
Hardship status is not a good solution. It does not end your debt. The IRS will continue to check your returns every two years to determine if you can pay. Interest and penalties continue to gain, and you may also end up with a tax lien. You may just be delaying the inevitable and accruing more debt.
Before trying to file a hardship claim, you should consider other options that may be more beneficial to you. You may qualify for an installment agreement if you can pay a small monthly payment. Or, you may qualify for an offer in compromise, which allows you to pay less than what you owe.
Few people qualify for hardship status. To determine whether you qualify, or consider your other options, call my office. I can help you look at all the options available to you based on your specific situation, and determine which one is best for you. I can help you file the appropriate paperwork and get out from under your IRS debt.