IRS Hardship Requirements to Qualify for IRS Uncollectible Status
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 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 the IRS were to collect taxes owed from you would you be able to:
- Provide food for yourself?
- Pay your mortgage or rent?
- Keep retaining utilities?
- Obtain transportation to and from work?
- Keep your job?
- Obtain necessary medical treatments and medications needed?
- Obtain a reasonable amount of clothing?
- Not lose educational opportunities?
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:
- $227 for food
- $85 for apparel and service
- $28 for housekeeping supplies
- $30 for personal care and services
- $87 for miscellaneous expenses
- $57 for Under 65 Health Care and $144 for over 65
- $163 for public transportation, more for ownership of cars and difference of region, see links below for more details
- $1,000 rough average for housing. Varies greatly by state and area. See link below for more details
Below are the links to the more detailed descriptions of common standards for common necessities which includes amounts for more than one person.
- National Standards Food, Clothing and Other Items
- National Standards: Out-of-Pocket Health Care Expenses
- Local Standards: Housing and Utilities
- Local Standards: Transportation
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.