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IRS Hardship Letter

Having problems paying your taxes? You should make arrangements with the IRS to pay your taxes through various options like a payment plan, offer in compromise, not collectible status, etc. The IRS also has a “Fresh Start” program that increases the lien thresholds for qualifying taxpayers and businesses. So the first thing you will want to do is write to the IRS requesting permission to have a monthly installment payment arrangement. You need to file Form 9465, Installment Agreement Request, and attach it to your tax return. It would be a good idea to pay as much of your tax liability when filing your return so that you lower your penalties and interest charges as much as possible.

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There is no form to fill up for hardship, so you can write a letter of your own explaining your circumstances and requesting an installment payment plan.

Here are the salient points you should cover in your hardship letter:

  • Your personal particulars – Your name, address, Social security number, telephone, etc.
  • Details of your tax bill – how much you owe and for which tax years, any penalties or interests charged
  • Impending actions by IRS (if any) – notice of intent to levy, wage garnishment, tax lien, etc.
  • Explanation of your reasonable cause for hardship – job layoff, salary cut, hospitalization, serious illness, etc.
  • Include supporting documentation for your reasonable cause – pay stubs, letter of termination of employment, medical bills etc.
  • Your request – installment payments, offer in compromise (OIC), abatement of penalties and interests or other
  • Ask for an appointment to meet with an IRS officer

As with all official correspondences, keep your hardship letter short and simple. Keep a copy of your letter before you mail it. The IRS normally responds within 60 days. So you should wait about 45 days after you have mailed your letter to the IRS and if you do not get a reply, send another copy of your hardship letter. Simply change the date on the letter.

If your request is rejected, your final recourse would be to approach the IRS’ National Taxpayer Advocate. The Taxpayer Advocate represents your interests and concerns within the IRS by protecting your rights and resolving problems that have not been fixed through normal channels. You can call the Taxpayer Advocate at (813) 295-7648.