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Lev, Tax Advisor
Category: Tax
Satisfied Customers: 29966
Experience:  Taxes, Immigration, Labor Relations
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My husband and I have been behind and paying back taxes

Customer Question

My husband and I have been behind and paying back taxes for several years...I am no longer receiving disability and been unemployed almost (12) years...he has been unemployed over (3) years, and working part-time/(12) hours/week. We can no longer pay the $100/month agreement, have missed the last (2). Is there any way the IRS would
lessen the amount due...we both have Social Security income. Thank you.
Submitted: 1 year ago.
Category: Tax
Expert:  Lev replied 1 year ago.

If you have an installment agreement with the IRS in place - it is VERY important to keep it current and prevent the situation when the IRS terminates such agreement.
If you are not able to pay - first of all - you need to contact the IRS - and ask to modify such agreement with lower monthly payments.
Other options possible but it is very important to have your installment agreement in place...

Expert:  Lev replied 1 year ago.

The IRS has a special policy which provides the authority for reporting accounts currently not collectible (CNC)

That status means - the IRS suspends all collection and enforcement activities and will NOT levy on your income and assets. For instance - if the IRS already levied on your wages - the IRS would release that levy.

But the IRS still will keep tax liens in place and they will report your tax debt on your credit report for long time. The IRS generally review your CNC status in 2 years but that depends on the original CNC placement.

Generally - you may be under CNC status for many years - as long as you not able to pay due to your financial situation.

Expert:  Lev replied 1 year ago.

Another option woudl be to make an offer in compromise OIC.

People facing financial difficulties may find that there's a tax impact might be eligible for special treatment based on their economical hardship.
Treasury Regulation authorizes the IRS to consider OIC's raising these issues. These offers are called Effective Tax Administration (ETA) offers.
Most importantly, if you believe you may have trouble paying your tax bill, contact the IRS immediately. In many cases, there are steps we can take to help ease the burden. You also should file a tax return even if you are unable to pay so you can avoid additional penalties.
Low Income Taxpayer Clinics (LITCs) represent low income taxpayers before the Internal Revenue Service, assist taxpayers in audits, appeals and collection disputes, and can help taxpayers respond to IRS notices and to correct account problems. If you are a low income taxpayer who cannot afford professional tax assistance and need help understanding your taxpayer rights and responsibilities, you may qualify for help from an LITC that provides assistance for free or for a nominal charge.
The LITCs are generally operated by nonprofit organizations or academic institutions.
Factors that support an economic hardship determination may include:
-- The taxpayer is incapable of earning a living because of a long term illness, medical condition or disability, and it is reasonably foreseeable that the financial resources will be exhausted providing for care and support during the course of the condition.
-- The taxpayer may have a set monthly income and no other means of support and the income is exhausted each month in providing for the care of dependents.
-- The taxpayer has assets, but is unable to borrow against the equity in those assets, and liquidation to pay the outstanding tax liabilitie(s) would render the taxpayer unable to meet basic living expenses.
Based on your information you might be eligible for the hardship status.
and I suggest to consult with the Taxpayer Advocate Service (TAS) is your state.
call at _1_877_777_4778_ to verify specific location.
See here for additional information
Sorry again for your situation.
Let me know if you need any help.

Expert:  Lev replied 1 year ago.

Hi Cynthia,

I appreciate if you take a moment to rate the answer.

Experts are ONLY credited when answers are rated positively.

If you still have any doubts, need clarification - please be sure to ask.
I am here to help you will all tax related issues.