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What is an IRS Hardship Letter?

If a levy on your wages will cause financial hardship, contact the IRS by sending them a hardship letter or call via telephone. The hardship letter is a formal document that describes your financial situation, asks the IRS for leniency, and requests permission to have a monthly installment payment arrangement, new payment deadlines, offer in compromise, etc. The IRS even has a “Fresh Start” program that increases the lien thresholds for qualifying taxpayers and businesses. With a Hardship Letter, the IRS normally responds within 60 days.

How to Apply for an Installment Agreement via a Hardship Letter

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.

What to Include in the IRS Hardship Letter

There is no form to fill out 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, etc.
  • Ask for an appointment to meet with an IRS officer

Tips on Writing a Hardship Letter

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.

The IRS Rejected My Hardship Letter. Now What?

If your request is rejected, your final recourse would be to approach the . We represent 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  at (813) 295-7648 or complete an online form to schedule a consultation.

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