How long does IRS Hardship last? There is no definite answer.
So exactly how long does IRS hardship last?
“How long does IRS hardship last?” is a very good question. Do you want the long answer or the shorter version? Honestly, there is no perfect answer to the question, Well, to start off, let’s take a look at a bit of the official IRS information about this tricky question. IRS says that:
We might actually determine that you cannot make any monthly IRS Installment Agreement payments to us for quite a while. We could make you pay us as little as ten dollars monthly. But we might also create an “undue economic hardship” on you if we required a monthly payment of even ten dollars. If this is true, we can “temporarily” put off our enforced collection efforts like an IRS tax levy or IRS bank levy. We can do this until your financial condition gets better and then we can begin the process of monthly payments.
Notice that the word “temporarily” is used. Temporarily doesn’t mean forever. Nor does it mean just a few days or weeks or even months. But it also doesn’t mean one year or two years or three years or five years, etc.
The Internal Revenue Service doesn’t have a specific period of time for IRS Currently Not Collectible Status. But they do have some guidelines and rules for it. Many of these rules depend on your future income and your future living expenses.
Depending on your unique and specific circumstances your IRS Uncollectible Status could last for over ten years. However, it might also last just a year or even less.
How long does IRS hardship last if my income increases significantly in the next few years?
If your W-2 wages or 1099 self-employed income increases sharply from one year to the next, that increase will be noticed by IRS. The IRS computer system is smart. It can easily tell if your reported income increases 15% or more from one year to the next.
You might get a new and higher-paying job or you could get a promotion and a larger salary. Possibly, you may begin to work two jobs and earn more income.
In such cases the IRS may want to review your status. They may determine that your income has increased to the point where you can make regular monthly payments to them.
In this scenario IRS could revoke your inability to pay status.
How long does IRS hardship last if my expenses decrease significantly in the next few years?
Your monthly living expenses might actually decrease the next few years. If those “ordinary and necessary living expenses” decrease enough, IRS may want to review your case.
Upon review of your case, IRS may determine that your monthly expenses have decreased enough to require monthly payments to them.
Easy to determine expense decreases could be as simple as paying off a car loan or moving to a new residence that costs less than your previous home. Dependents claimed on previous tax returns may become self-sufficient and begin filing their own federal income tax returns.
Under such circumstances IRS could review your financial status and determine that you could begin making monthly payments. If so, your IRS Hardship status could end.
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We hope this IRS Currently Not Collectible information has been helpful.