Describe the budget, not just the stress
When a tax balance is competing with rent, groceries, or medical costs, the first useful task is to put the financial picture on paper. “I cannot afford it” explains the concern. Income, expenses, and asset records provide the facts needed to evaluate options.
What a temporary collection delay means
The IRS may place an account in Currently Not Collectible status when financial hardship prevents payment. Most collection activity is temporarily suspended, but the tax debt remains. Penalties and interest continue. The IRS may later review your finances, resume collection if your ability to pay improves, apply refunds to the debt, or file a Notice of Federal Tax Lien.
Prepare the supporting information
The IRS may require a financial statement and documents verifying income, living expenses, bank accounts, and assets. Start with recent, consistent records. Our suggested worksheet separates recurring costs from one-time expenses and notes any expected change in income. Keep the explanation factual and attach the records that support it.
Avoid guessing at the outcome
For example, a temporary loss of work and a long-term reduction in income may look similar in one bank statement but require different explanations. Do not omit an account because the balance is low, or assume a high local cost automatically determines eligibility. A complete picture is more useful than a carefully selected one.
Keep deadlines visible
A hardship review is a process to request and verify, not something to assume has already happened. Keep responding appropriately to notices while your options are being evaluated. Kōkua Tax can help you organize the issue and identify the next step. Request a free assessment using a general description; provide detailed financial records through the secure intake process.
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