What You Need to Know About the IRS Hardship Program

If you are a law-abiding US citizen, chances are you're doing your best to pay your taxes to avoid consequences. However, there are times when good-hearted individuals really cannot pay their taxes for many reasons. Fortunately, the IRS offers something known as the IRS Hardship Program. As the name implies, this program is meant for those who have problems filing for taxes to act as a relief solution.

That said, here's more about the IRS Hardship Program to help you know all about it:

What Is It?

The IRS Hardship Program is primarily used to provide individual taxpayers temporary relief from the results of a difficult financial situation they are in. This can be anything from unemployment, being ill, an unexpected death in the family, even the family splitting up. It's important to note, though, that this program is not meant as a form of tax assistance. It's also not used to pay past-due taxes.

It is also important to note that the IRS Hardship Program is only for individual taxpayers. In other words, businesses and non-profit organizations are not eligible for this program.

Who Can Apply?

The IRS Hardship Program is available to everyone, regardless of their residence. If you are in the US, then you can apply for the Hardship Program. It really doesn't matter what your nationality is, nor does it matter where you are currently residing. All you have to do is prove the eligibility for the program, and it's a go.

How Does It Work?

First off, you have to show that you are eligible for this program. Eligibility is usually determined by the IRS. Once you are officially eligible, then you will have to gather the necessary information needed for the Hardship Program. You then have to fill out Form 1127 and send it to the address indicated.

Once you are verified by the IRS, you will be given an installment agreement that's agreeable to the IRS. You will still have to pay a certain percentage – usually 10% – of your taxes.

You will also be provided with a reasonable payment plan that's acceptable to you and the IRS. However, you need to remember that paying this installment will be done every month.

Once you have successfully filled out Form 1127 and sent it to the IRS, you will receive further instructions on what to do next.

How Long Does It Last?

The IRS Hardship Program is not indefinite. Once you receive the installment agreement, you will have to pay off the amount in a period of three years. You can also ask the IRS to extend it to pay off the taxes in a period of five years.

What If You Do Not Comply?

If you violate the terms of your installment agreement, the IRS will revoke it and put the charges back on you in full. You will then have to face the consequences of your failure to pay your taxes. If you were able to pay off the installment before the IRS revoked it, you would have to pay off the taxes you owe.

Conclusion

Remember that the IRS Hardship Program is a temporary fix for those who cannot file for taxes for any reason. If you're still having a hard time paying your taxes even after this program, you may want to contract the help of a tax relief professional to help you file. That way, you can meet your tax obligations without suffering severe financial hardships or running into more trouble with the IRS.

Tottax offers tax services for businesses and individuals alike to help everyone stay on top of their tax needs. If you are looking for a personal tax accountant in Denver to help you meet your tax obligations, work with us today!