How To Qualify For IRS Uncollectible (Hardship) Status, If You Are Unable To Pay Your Tax Bill

TaxConnections Member Milton Boothe

If you owe the IRS, and are unable to settle your tax bill because you do not have the resources to do so; don’t panic, there might be a way out – the IRS could declare you “Uncollectible.”

In order to be declared uncollectible by the IRS you will have to prove to them that if they were to collect the tax owed to them it would create unfair economic hardship for you. The IRS doesn’t necessarily have a set formula for declaring individuals uncollectible, and will consider each person on a case by case basis; so there is no guarantee, but it’s worth a try.

The IRS will evaluate individuals to see if further collection of taxes from them would create economic hardship, and will probably look at a specific factor or a number of factors combined to determine if you indeed qualify for this status.

The IRS would probably ask these questions: If they were to collect the taxes you owed, would you be able to:

• Provide adequate food for yourself
• Pay your mortgage or rent
• Keep your utilities running
• Transportation for yourself to and from work, so that you can keep your job
• Obtain any necessary medical treatment needed

If you can prove that you are unable to meet these basic needs, you might have a chance of being declared uncollectible by the IRS. In order to obtain this status, however, you will be required to submit some IRS forms and lots of personal financial information to the IRS, outlining your financial situation.

Once the IRS approves, then this will temporarily stop collections. The IRS will follow up several months later to see the financial situation has improved enough in order to start collections again. Please note that this status won’t solve your tax problem, but it will buy you a little more time to deal with it.

The primary objective of this article is to empower taxpayers with tax knowledge. For more information on how to do business with the IRS, grab yourself a copy of “Doing Your Own Taxes is as Easy as 1, 2, 3” on

Milton G Boothe is an IRS Enrolled Agent with over twenty years of tax and financial accounting experience, including several years at PricewaterhouseCoopers. He is also a British certified Chartered Accountant. He is currently employed in private tax practices where he helps people resolve their tax problems, minimize their taxes, and routinely represents the interests of taxpayers before the Internal Revenue Service. As an Enrolled Agent (EA) Boothe is a federally-authorized tax practitioner who has technical expertise in the field of taxation and who is empowered by the U.S. Department of the Treasury to represent taxpayers before all administrative levels of the IRS for audits, collections, and appeals.
Milton G Boothe is also the author of several tax publications, wherein he encourages people to empower themselves by learning to do their own taxes.

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