If your federal return has already been filed and you are due a refund, you…
In order to be declared uncollectible by the IRS, you will have to prove to the IRS that if they were to collect the tax that is owed to them it would create an unfair economic hardship. The IRS will consider each person on a case-by-case basis. The IRS doesn’t necessarily have a set formula for declaring individuals uncollectible because they will look at maybe only one specific factor or multiple factors combined. The following are some questions the IRS will be looking to answer. If you can answer no to any of these, you will be are a likely candidate for being declared uncollectible.
If you answered no to any of the above questions you have a chance of being declared uncollectible by the IRS. One thing to keep in mind is that all monetary considerations for food, clothing, health care, housing, utilities, and transportation are subject to the collection of financial standards as a guide for the IRS to determine what expenses and considered reasonable and necessary. As of March 1, 2008, the monthly amounts allowed for a single person are listed below:
Below are the links to the more detailed descriptions of common standards for common necessities which include amounts for more than one person.
Only a small percentage of people actually qualify for this type of relief. It is a good idea to be very confident that you will fall into the qualifications listed above to qualify before trying to apply or asking your collector to declare you as status 53. If you feel you may meet the requirements for this status it is a good idea to talk with a tax professional because there can be other options that you may qualify for that will allow you to settle your taxes for less.
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