Let's say you owe the IRS money for some past tax liabilities. You know, based on your life's current circumstances, that there is no way that you can make good on the payments that you owe. What can you do?

Well, the absolute worst thing you can do is: NOTHING. As we have discussed in previous blogs, when you do nothing, the IRS feels that you are ignoring and avoiding them, so their financial "claws" come out. The IRS will ratchet up the financial pain until they get your attention.

What if you know you have to pay, but there is just no money left at the end of the month to send to the government?

"It is possible to put your payments on pause if you can prove the payments would cause a financial hardship and leave you unable to pay for your basic living expenses. Such a situation may result in a Currently Not Collectible (CNC) status of your IRS account.

If the IRS agrees with your hardship, collection by the IRS may be delayed until your financial situation improves. Your tax debt is not cancelled, but collection activity (such as levy of your bank accounts or wages) will generally stop. This gives you some breathing room to hopefully get back on your feet and begin making payments again when your circumstances improve.

Note: the IRS generally won't simply take your word that you cannot pay. They will require proof in the form of financial records and a request for CNC status must be properly made to an IRS Collections representative.

The IRS will revisit your financial condition periodically to see if you have regained your financial footing enough to begin payments. It is important to keep filing your tax returns to remain in compliance with federal tax laws.

We hope this never happens to you, but if you can't make your IRS payments, contact an experienced tax professional like us who specialize in IRS collection matters to assess your financial hardship and offer a comprehensive plan to deal with the IRS.

To CONTACT US email: kevin@regotaxlaw.com or visit www.myirstranscript.com to find out more about our tax transcript monitoring service today! We are located in San Mateo, CA and serve the greater Northern California area as well as nationwide!