Can't Pay? You're dirt
poor. Is economic hardship keeping your from paying your IRS
Debt? Are you living paycheck to paycheck? Prove it. If you
can do that, the IRS will actually stop collecting from you!
But how can you prove this to the most powerful collection
agency in the world?
Review: If you qualify, the IRS will Suspend the
Collections process. This is known as the "Suspended
Collections" or "Hardship Plan." But how do you know if you
qualify? If paying the IRS would make you go without basic
needs, then you could qualify.
What to provide: If
you still think you qualify for an Offer in Compromise, get
out your pen and paper. You'll need to provide the following
information in forms 433A (433B for Businesses)
- Food:
Groceries, School Lunches
- Clothing:
Replacement, Laundry Bill
- Medical:
Medications, Hospital Bills, Doctor and Dentist Fees
- Taxes:
Income-State, Income-Federal, Property, Other taxes
- Insurance: Car
Insurance, Homeowners/Renter's Insurance, Health
Insurance, Etc.
- Transportation:
Public Transportation, Parking/Tolls, Gas, Registration,
Maintenance
- Professional
Services Bills: Attorney, Tax professional,
Accountant, etc.
- Installment
Payments: car, credit card, student loan, personal
loan, department stores, etc.
- Family Expenses:
Child Support, Alimony, Private School, College, Child
Care
- Other:
Charitable contributions, entertainment, recreation,
subscriptions, household and cleaning supplies, personal
items, payments you make to help Dependants, etc.
Plus: The IRS won't
let you off that easily. You'll also need to provide
detailed information like your place of work, bank accounts,
investments, money not in your bank account, real estate,
credit cards, cars, and personal assets. If you have enough
assets to satisfy your debt, the Hardship Plan may be
denied.
Bare Minimum: What
does the IRS consider "Basic Needs"? Not your car payments,
credit card payments, student loan payments or even money
for your Retirement plan. The IRS considers your need for
food, housing, transportation, and medical bills your basic
needs. So if you're sending your kid to an expensive
university, watch out. The IRS might make you send them to
community college.
Now You Have The Smoking
Gun...Use it!
