Any law-abiding US citizen must pay taxes or suffer dire consequences. However, there are relief options for those who can’t do so. One such example is the IRS Hardship Program. When you file your taxes, you may qualify for a program offered by the IRS, called the Hardship Program.
Before getting into the details, it’s worth noting that the IRS Hardship Program is not a personal tax forgiveness option. That said, the IRS Hardship Program is designed to assist those people who can’t pay their taxes and offer them some form of financial relief.
This article will discuss what there is to know about the IRS Hardship Program. Read on below to get started.
What is the IRS Hardship Program?
To be eligible for the Hardship Program, a taxpayer must meet several criteria. It could be anyone who has experienced a death in the family, lives in a disaster area, or has experienced a catastrophe at their residence can apply for a hardship. Alternatively, the taxpayer can request a hardship if they can’t file due to a disability.
However, the IRS doesn’t just grant assistance on a whim. Each case is thoroughly examined. Five factors determine whether you’re eligible for a hardship exception:
- Your financial status
- Your investment activities
- Your net worth
- Your financial records
- Your history of filing taxes
The IRS has strict requirements you have to meet to qualify. Only those who meet these qualifications can be granted the exception. If you meet the requirements, you may be eligible for the IRS Hardship Program.
The IRS takes the hardship exception program seriously. They do not grant tax forgiveness to those who ignore their tax obligations. Being granted a hardship exception does not mean you will get out of paying your taxes. Instead, you will get an extended time to pay your taxes.
How to Apply for the IRS Hardship Program
Applying for the Hardship Program isn’t as simple as filing a single form. You have to complete a number of documents to be considered. You have to include all of the required documents with your application.
The IRS has a list of documents they require:
- Your income information
- Your expense information
- Your financial records
- Your net worth statement
- Your reason for applying for a hardship
The documents that you turn in need to be complete and accurate. The IRS will use these documents to decide the hardship you’re requesting. They’ll review your information and make a decision based on your situation.
How the IRS Hardship Program Can Help
The IRS Hardship Program is meant to help taxpayers who have experienced something out of the ordinary. Due to unexpected circumstances, you may qualify for hardship if you have a tax debt. The IRS has a variety of criteria for qualifying for a hardship.
If you meet their qualifications, the IRS will grant you an exception to your tax debt. You’ll still owe the taxes you owe, but there will be an extension to pay your tax debt. In most cases, you will be granted a stay of execution.
In most cases, the IRS will give you a four- or five-year repayment plan. This is an extension on your payment. The IRS will charge you interest on the taxes that you owe.
The Interest Rate
The interest rate you’ll be charged depends on your income status. If you’re a low-income household, you will have a lower interest rate. If you are a higher-income household, you will have a higher interest rate.
For taxpayers whose income is lower than the stated income level, the interest rate is 1%. For taxpayers whose income is higher than the indicated income level, the interest rate is 2%.
The Repayment Period
The IRS will also give you a repayment period. They generally provide repayment periods ranging between four and five years. There are some exceptions, but this is the general rule.
The IRS gives you an extension on your taxes. This is just like a deferment; you’ll still owe the taxes you owe. However, you’ll have more time to pay them.
You will fill out a form when you file to get the IRS Hardship Program. The IRS will then process your application. They will review your documents and decide whether you qualify for the hardship. After deliberation, they will determine if it will be granted.
If you can’t pay your taxes, you may qualify for the IRS Hardship Program. You will have to meet several qualifications before the IRS considers you. If you do, you will be eligible for an extension on your tax debt.
Axiom Tax Resolution Group aims to assist anyone struggling financially through tax relief solutions. We ensure that your tax situation will be resolved in the best possible way to solve your issues. Contact us today to find out how we can help!