How to Prove Financial Hardship to the IRS
A majority of the individuals who owe money in IRS back taxes are unable to pay. They have no job, no income, and no assets. However, even when someone lacks these things, the IRS will still come after them to pay their tax debt. It is not right to take this kind of abuse from the IRS. However, unless you take the necessary steps to get your account considered “Currently not Collectible” or placed in “Hardship,” the IRS will proceed by bombarding you with notices and phone calls.
If you are positive that there is just no way you will be able to pay your tax debt now or at any point in the close future, a status declaring you either “Currently not Collectible” or “Hardship” is just the answer. You need to locate and put together all documentation that proves you are unable to pay your IRS tax debt. If a person is disabled, and therefore unable to work, provide all the necessary documentation, which would include government and hospital records. Monthly bills and pay stubs (if applicable) also need to be included.
After you have been able to gather all the documentation that proves financial hardship, you need to mail it with Form 433 A, “Collection Information Statement for Wage Earners and Self-Employed Individuals.” This form requires you to divulge detailed information about the current financial situation you are undergoing. You will be required to provide the cost on different monthly expenditures, including all of the following: