IRS Hardship | IRS Uncollectible | Flat Fee Tax Service | San Diego
Updated: Apr 8
The correct term for “Currently Uncollectible” is Currently not Collectible (IRS Hardship) is a method for delaying payment (possibly eliminating payment) of your IRS Tax Debt. The tax professionals at Flat Fee Tax Service are led by an IRS Tax Attorney who will work directly with you. Together, we will work to convince the IRS that you have no way of paying your IRS Tax debt at this time.
We, at Flat Fee Tax Service, as the nationwide leader in stopping an IRS Levy / Tax Levy, usually hear from our clients when they have had a Tax Levy executed by the IRS.
Many of our clients are on Social Security or Social Security Disability (SSDI) and do not have the ability to survive an IRS Levy / Tax Levyand may very well be a candidate to be placed in a status of Currently Uncollectible (IRS Hardship) by the IRS. You do not have to be on Social Security or be on Social Security Disability (SSDI) to be designated as Currently Uncollectible.
The IRS has a complex method of calculating 3 items:
1. Gross Income
2. Allowable Expenses
3. Assets or Lack of Assets
When you put those 3 items together in the IRS formula, you come up with a taxpayers ability to pay their back tax. Of course, the human element is always a part of this equation.
The IRS Revenue Officer handling the Currently not Collectible petition and the Tax Advocate for the taxpayer play a big part in the decision.
Some of the Allowable Expenses considered for the Currently Uncollectible program are:
a. Food & Clothing
c. Car Payment
d. Car Allowance
c. Medical Expenses (Insurance, prescriptions, etc)
d. Child Support
e. Rent / Mortgage
There are limits on the amounts that the IRS will allow. An experienced Tax Professional will help in the negotiation with the IRS.
The IRS will consider you “Currently not Collectible” (IRS Hardship) and this status will usually be for a period of one year (twelve months) to 18 months. At the end of the Currently Uncollectible period, you, the taxpayer, will need to show the IRS that your economic situation has not changed. As long as you enjoy the status of Currently Uncollectible with the IRS, you will not be expected to pay any of the IRS tax debt. Your statutory period (IRS Statute of Limitations) does not freeze/stop. The Statute of Limitations continues to decrease as usual.
An important note to being placed in IRS Hardship status by the IRS is this:
If the IRS admits that you cannot pay your back tax, doesn’t it make sense to follow up your Currently not Collectible status with an Offer in Compromise petition and clean up your back tax once and for all? We believe that if you are Currently Uncollectible that you should continue and clean up your back debt altogether.
You should consult with a Tax Professional. If you would like to speak to us, the team at Flat Fee Tax Service welcomes your call.