Answer

Hello again, Ok, if you were not in an Installment Agreement with the IRS already you may request one if you cannot pay the liability in full. This is an agreement between you and the IRS for the collection of the amount due in monthly installment payments. To be eligible for an installment agreement, you must first file all returns that are required and be current with estimated tax payments. If a taxpayer is already in an agreement with the IRS and is unable to pay his or her tax liability, and collection activity would create an economic hardship the IRS will consider placing the account in a “hardship” or currently not collectible status. In considering a taxpayer’s account for “hardship” status the IRS will compare the taxpayer’s monthly gross income against what they call “allowable” expenses. IRS monthly allowable expenses are national averages for food, clothing, miscellaneous expenses, housing, transportation, medical expenses and insurance, as well as proper tax withholding and payments. These “allowable” amounts vary depending on household size and local standards as well. Being placed in “hardship” status is not a permanent solution to a tax problem. A taxpayer that is currently not collectible will have his or her status reviewed every 18 to 24 months by the IRS to determine if “hardship” status is still warranted. Contact the IRS using the contact information on the letter you most recently received and explain your situation and request assistance from them. Completion of Form 433F, Collection Information Statement will be required from you. Do not wait, the IRS will take action and a lein placed on your accounts or property is one way they can use.