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How Can I Be Considered Uncollectible by the IRS?
If you have a large tax debt that can be daunting. But, understanding how to qualify as "uncollectible" by the IRS can provide some relief. The IRS may classify a taxpayer as uncollectible if they demonstrate an inability to pay their tax debt due to financial hardship. Here’s how you can achieve this status:
Assess Your Financial Situation: The IRS will evaluate your income, expenses, and assets. Ensure your financial records accurately reflect your inability to pay. Essential expenses like housing, utilities, food, and transportation are considered.
Locate a Tax Professional: Marcelino Dodge, EA, CTRC can help you to file the proper forms using both actual expenses and national standards to see if you do qualify as uncollectible. If you do not qualify, Marcelino will propose alternatives to assist with with your tax issue.
Submit Supporting Documentation: Provide proof of income, expenses, and assets. This includes pay stubs, bank statements, and bills. The IRS uses this information to determine if your financial situation warrants uncollectible status.
Stay Informed: Being uncollectible is not permanent. The IRS will periodically review your financial status. Keep your records updated and be prepared for future evaluations.
Achieving uncollectible status can provide temporary relief from tax debt collection, allowing you to focus on regaining financial stability.
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