Economic hardship status is when the IRS determines that you cannot make payments without impacting your basic living necessities. This is also sometimes referred to as “Currently Not Collectible” or CNC status.

In order to be considered for this status you will need to submit a Collection Information Statement to the IRS to request a determination of economic hardship. If this is granted, the IRS will temporarily suspend collection activities and any payment requirements, and will also release any levies it might have against your assets. Penalties and interest will continue to accrue on your debt until you pay it in full.

It is important to keep in mind that, while you may have an economic hardship based on your real-world situation because of the limited living expense allowances permitted by IRS, the IRS may not determine that you have an economic hardship when it comes to paying outstanding tax liabilities. While you may be operating in the red according to your bank statements, you may be in the black under the IRS’s calculations.

During our comprehensive assessment process, our tax professionals will be able to determine whether or not you might qualify for economic hardship status. If you do not qualify, we can help you figure out what type of tax debt relief would be best for your specific situation.