If you’re experiencing financial hardship and struggling to pay back taxes, you’re not alone—and you’re not without options. Whether it’s due to a job loss, medical emergency, or other financial setback, the IRS offers several tax relief programs designed to help individuals and business owners in distress.
In today’s article, we’ll break down the most effective IRS relief options and explain how a tax resolution professional like Jablonsky Tax Relief can help you get back on solid financial ground.
What Is Financial Hardship in the Eyes of the IRS?
Financial hardship, or what the IRS calls “economic hardship,” occurs when paying your tax debt would prevent you from covering basic living expenses. The IRS doesn’t want to put taxpayers in a position where they can’t afford food, housing, or medical care. That’s why they offer relief options for qualifying individuals and businesses.
But make no mistake—the IRS won’t automatically know you’re struggling. You must proactively demonstrate your situation and apply for the appropriate program.
Common Tax Relief Options for Financial Hardship
Currently Not Collectible (CNC) Status
If you can prove that you have no ability to pay—after accounting for necessary living expenses—the IRS may temporarily halt all collection activity. While your debt doesn’t disappear, CNC status prevents levies, garnishments, and other enforcement actions. Interest and penalties may still accrue, but this can buy you valuable time.
Offer in Compromise (OIC)
This is the IRS’s “settlement” program. If you can’t pay your full tax debt without severe financial hardship, the IRS may accept a lesser amount as full payment. Qualifying requires a detailed financial analysis, and approval rates are low without expert help—but it’s a powerful option for the right situation.
Partial Payment Installment Agreement (PPIA)
This type of payment plan allows you to pay less than the full amount you owe over time. The IRS will review your financials and determine what monthly amount you can realistically afford. At the end of the collection period, any remaining balance may be forgiven.
Penalty Abatement for Reasonable Cause
If financial hardship or other situations prevented you from filing or paying on time, you may qualify for penalty relief. Demonstrating “reasonable cause” can eliminate thousands of dollars in added penalties and help you stabilize your financial situation.
Innocent Spouse Relief
If your spouse (or ex-spouse) was responsible for the tax issue and you weren’t aware of it, you may be able to remove yourself from the debt. This is only applicable to cases involving joint tax returns.
Don’t Let Financial Hardship Spiral into Tax Disaster
Tax debt doesn’t go away on its own—and the longer you wait, the more penalties and interest will pile up. If you’re overwhelmed and unsure where to turn, let us help.
Contact us today for a FREE consultation by calling (972) 821-1991 or by going to https://jablonksytaxrelief.com and by clicking Schedule a Free Consultation and setting up an appointment on our calendar. We’ll help you understand your options and fight to protect your financial future.
