IRS Hardship Program Explained: What It is and Who Qualifies

Tax debt can feel crushing. When paychecks are tight, medical costs rise, or a business has a sudden cash-flow shock, the thought of IRS levies, wage garnishment, or bank seizures keeps people awake at night. Putting off action makes things worse. The IRS can escalate enforcement, interest, and penalties compound, and you may lose access to relief options if you fail to file required returns or respond to notices. Many taxpayers confuse temporary relief programs with permanent forgiveness and end up taking steps that backfire. The IRS Hardship Program (most commonly encountered as Currently Not Collectible or CNC status) and related options give taxpayers breathing room when they truly cannot pay. In this blog, we explain what the IRS Hardship Program is, how CNC works, what it does and does not stop, and why early legal guidance from an experienced tax attorney is often the best route to protect income and essential assets.

What is the IRS Hardship Program?

The IRS “Hardship” pathway is the administrative relief the IRS provides when paying a tax debt would prevent a taxpayer from meeting basic, necessary living expenses. In practice, the term usually refers to the Currently Not Collectible (CNC) status, though the IRS also offers other hardship-sensitive options such as installment agreements, Offers in Compromise, and penalty relief.

How CNC works — the essentials 

• What CNC does: Temporarily suspends collection enforcement (for example, levies and garnishments) because the taxpayer cannot afford payments without sacrificing basic living needs. Collection is paused, not forgiven.
• What still happens while in CNC: Interest and penalties normally continue to accrue on the outstanding balance, and refundable tax credits or refunds you are owed may be applied against the liability. The IRS periodically reviews CNC cases to confirm the hardship continues.
• How qualification is decided: The IRS evaluates your documented income, allowable living expenses, assets, and outstanding debts to determine whether paying would create undue hardship. This is a fact-driven, case-by-case analysis.
• Duration and review: CNC is not typically permanent. The IRS can reopen collection if your financial situation improves; they may ask for updated financial information during periodic reviews.

Other hardship-sensitive options

• Installment agreements: When some payment is possible, the IRS will often accept a monthly plan tailored to the ability to pay. This avoids immediate enforcement while you pay down the account.
• Offer in Compromise (OIC): For taxpayers whose reasonable collection potential is limited, an OIC can settle tax debt for less than the full balance – but qualification is strict and requires complete financial disclosure.
• Penalty abatement: When penalties were caused by reasonable circumstances (illness, disaster, incorrect professional advice, etc.), the IRS may remove penalties even if the underlying tax remains.

What to expect when you ask for hardship relief from the IRS

1. Prepare a financial package: The IRS will demand documents such as bank statements, pay stubs, proof of recurring expenses, asset lists, and recent tax returns. The IRS uses this to evaluate your ability to pay.
2. Temporary pause of enforcement: If CNC is approved, enforcement steps generally stop until it is in effect, but interest and some IRS administrative processes continue.
3. Periodic review: Expect the IRS to re-evaluate your status. If circumstances improve the IRS can resume collection activity.

When hardship may be the right first step

• You have zero meaningful disposable income after essential living costs.
• You face imminent levy or garnishment and need an immediate administrative stay.
• You need time to assemble documentation for other relief (Offer in Compromise or installment plan) and want to halt enforcement while you prepare.

If tax debt is part of your situation, especially with enforcement already beginning, it is wise to get professional legal help. Experienced attorneys at the Law Offices of Nick Nemeth can help evaluate your CNC eligibility, assemble financial packages the IRS expects, and coordinate hardship status with other tax-relief options so you get the most protection available under the rules.

Who Qualifies for the IRS Hardship Program?

The IRS evaluates hardship on a facts-and-circumstances basis. There is no single numeric cutoff that automatically qualifies or disqualifies someone. Instead, the IRS looks at whether paying the tax liability would prevent you from meeting basic, necessary living expenses. Below is a practical breakdown of how eligibility is assessed for individuals and for businesses – plus the documentation you should have ready if you pursue CNC or other hardship-sensitive relief.

Eligibility for Individuals

An individual is more likely to qualify for CNC or similar hardship relief when all the following are true:

• Insufficient disposable income. After paying essential living expenses (housing, utilities, food, necessary transportation, medical care, and required insurance), there is little or nothing left to make meaningful payments toward the tax debt.
• Limited liquid assets. Bank accounts, readily saleable investments, and other cash equivalents are insufficient to cover the liability without creating severe hardship. The IRS expects taxpayers to use liquid resources first, so low bank balances and limited access to credit support a hardship claim.
• Documented, ongoing hardship. Recent events such as job loss, serious illness, major unexpected medical bills, or other sudden financial shocks that materially reduce your ability to pay are the strongest grounds for CNC. Chronic but demonstrable low income also supports the case.
• Filing compliance. Your required tax returns are filed and up to date. The IRS generally will not favor hardship relief for taxpayers who have unfiled returns.
• No realistic ability to borrow or liquidate without undue hardship. If using home equity, retirement accounts, or other assets would cause additional, severe hardship, the IRS will consider that in your favor.

Practical individual checklist (what you’ll need to show):

• Recent pay stubs and/or proof of unemployment or disability income
• Last 2–3 years of federal tax returns
• Recent bank statements (typically 3–6 months)
• Monthly household budget showing essential expenses (rent/mortgage, utilities, food, insurance, medical, transportation)
• Medical bills, layoff notices, foreclosure or eviction notices, or other documents that explain sudden hardship
• A list of assets and outstanding debts (mortgage balance, auto loans, credit cards)

These documents are required alongside a Collection Information Statement (Form 433-A)

Eligibility for Businesses

Business hardship is evaluated through the company’s cash flow and the practical ability to pay without putting the business or employees at undue risk. Key factors include:

• Negative or insufficient operating cash flow. If the business cannot meet payroll, rent, supplier obligations, or essential operating expenses while paying the tax debt, hardship relief is more likely to be considered.
• No viable short-term financing. If the business cannot obtain reasonable short-term financing or equity without destroying its viability, that supports a hardship claim.
• Preserving jobs and creditors. The IRS recognizes that forcing a business into insolvency to collect taxes can harm employees and other creditors; meaningful evidence that collection would cause widespread harm can support CNC or alternative relief.
• Up-to-date filings and payroll deposits. As with individuals, businesses must be current with their filing and deposit obligations.

Practical business checklist (what you’ll need to show):

• Recent business bank statements and cash-flow reports
• Profit and loss statements and balance sheets (recent months and year-to-date)
• Payroll records and proof of payroll obligations
• Evidence of attempts to obtain financing or restructure (loan denials, for example)
• Copies of IRS notices and any prior collection actions (levy, lien, etc.)

These documents are required alongside a Collection Information Statement (Form 433-B)

Common Disqualifiers and Important Caveats

• The ability to pay exists. If the IRS determines you have sufficient disposable income or unencumbered assets that could be used to satisfy the tax debt, CNC will likely be denied.
• Unfiled returns or submission failures. The IRS expects compliance: missing returns or unresolved filing issues will usually block hardship relief until filings are brought current.
• Temporary cash-flow problems vs. long-term hardship. Short-term liquidity hiccups (a one-time late invoice, for example) may be better handled with an installment agreement rather than CNC. CNC is for taxpayers who cannot pay without sacrificing basic living needs.
• Ongoing review. CNC is not necessarily permanent. If circumstances improve, the IRS can re-open collection and seek payments.

Practical next step

If you think you may qualify for CNC or other IRS hardship relief, gather the documents listed above and contact the Law Offices of Nick Nemeth. Our team will review your financial situation, advise whether CNC, an installment agreement, or another program (Offer in Compromise, penalty abatement) is the most appropriate path, and assemble the financial package the IRS expects, giving you the best chance to secure relief and protect essential income and assets.

Beyond CNC: Other IRS Hardship Programs or Relief Options 

When the IRS finds that paying your tax debt would force you to give up necessities, it will typically consider a range of hardship-sensitive remedies. Below are the options beyond CNC the IRS uses to address financial hardship, how each works, who it helps, and how an experienced tax attorney can improve the result.

1. Installment Agreements

What it is
An installment agreement allows you to pay your tax debt over time in monthly amounts the IRS accepts as reasonable based on your ability to pay.

Who it helps
Taxpayers who can afford a periodic payment but cannot pay the full balance immediately.

Key features

• Varieties: Short-term (pay in full within 120 days) and long-term (monthly payments over a longer period); streamlined options exist for smaller balances.
• Prevents aggressive enforcement (levies and garnishments) if you stay compliant with the agreement.
• Fees and interest still apply; interest and penalties continue to accrue unless the agreement terms provide otherwise.

What to submit

• Financial information demonstrating monthly income and allowable expenses if required (some streamlined agreements require less documentation).
• The IRS may require direct debit setup for longer-term agreements.

How an attorney helps

• Selects the best installment plan type and negotiates favorable terms (lower setup fees, longer amortization if appropriate).
• Prepares realistic financial disclosures so the IRS accepts the plan and reduces default risk.
• Monitors compliance and helps modify the plan if circumstances change.

When an installment agreement is the right call
Choose an installment agreement if you have a steady, if limited, cash flow and want to stop collections while you pay the debt off over time.

2. Offer in Compromise (OIC)

What it is
An Offer in Compromise lets qualified taxpayers settle a tax debt for less than the full balance when the IRS determines the offer represents the most it can reasonably collect.

Who it helps
Taxpayers whose reasonable collection potential (RCP) is low because assets and future income cannot reasonably satisfy the liability.

Key features

• Strict qualification: The IRS evaluates assets, income, allowable expenses, and potential recovery from enforced collection.
• Full disclosure required: Complete financial statements and documentation are necessary; incomplete submissions are often rejected.
• Nonrefundable fees may apply, and offers can take months to evaluate.

What to submit

• Detailed financial package (Forms 433 series, bank records, pay stubs, proof of expenses).
• The formal OIC application and any required application fee or initial payment.

How an attorney helps

• Precisely calculates your RCP, so the offer is realistic – not too high (wasting money) and not too low (guaranteeing rejection).
• Assembles supporting documentation and legal arguments (including effective tax administration or equity considerations) that strengthen the case.
• Negotiates with the IRS, responds to information requests promptly, and appeals denials when appropriate.

When an OIC is the right call
Consider an OIC if you truly cannot pay the full tax through lump sum or reasonable installment payments and your financial profile shows low long-term collectibility.

3. Innocent Spouse Relief

What it is
Innocent spouse relief removes a spouse’s liability for tax, penalties, or interest attributable to items on a joint return that were the responsibility of the other spouse.

Who it helps
Individuals who filed joint returns but can show they had no knowledge of the erroneous items, and that it would be unfair to hold them responsible.

Key features

• Multiple forms of relief exist (innocent spouse, separation of liability, equitable relief) depending on the facts.
• Fact-intensive: The IRS examines the couple’s knowledge, behavior, and economic circumstances.

What to submit

• A detailed statement of facts, financial documentation, and any evidence showing lack of involvement or knowledge of the problematic items.

How an attorney helps

• Identifies the right type of spouse relief and crafts the strongest factual presentation.
• Prepares the required petitions, gathers supporting evidence, and represents you in appeals if the IRS denies relief.

When innocent spouse relief is the right call
Use this option when joint filing exposes you to tax liability caused primarily by your spouse, and you meet the statutory or equitable criteria for relief.

How to Decide if the IRS Hardship Program Is Right for You

Deciding whether to seek IRS hardship relief is a factual, timing-sensitive judgment. Below is a practical decision checklist and simple flow you can use right away to determine whether CNC or another hardship-sensitive program is the best path – and when you should call an attorney.

Quick decision checklist

• Can you meet basic living expenses after taxes?
  If you have essentially no disposable income after housing, food, utilities, health care, and transportation, CNC is worth pursuing.
• Are you current with required filings?
  The IRS will generally refuse hardship relief until required returns are filed. If returns are not current, fix that first.
• Is enforcement imminent?
  If you have a levy notice, bank levy, wage garnishment, or a filed tax lien, urgency is high. CNC or an emergency levy release can stop immediate damage while longer-term options are prepared.
• Is the hardship temporary or long-term?
  CNC is intended for taxpayers who cannot pay without sacrificing essentials. If your problem is short-term (a temporary cash flow gap), an installment agreement may be a better fit.
• Are there assets or liquidity that could realistically be used?
  The IRS expects taxpayers to use reasonable available resources. If you have sellable assets or accessible credit that would pay the debt without creating hardship, CNC is less likely to be approved.
• Does your situation involve business income, self-employment, or complex tax issues?
  Business cash-flow problems and self-employment income require detailed analysis; sometimes, a business-focused repayment plan or restructuring is better than CNC.

Fast flow for next steps

1. Inventory: Gather recent tax returns, IRS notices/transcripts, bank statements, pay stubs, and a monthly budget.
2. Triage: If a levy or garnishment is pending, seek immediate relief (an attorney can request an emergency levy release).
3. Short-list options: If you truly cannot pay, consider CNC; if limited payments are possible, evaluate installment agreements; if long-term collectibility is low, evaluate an Offer in Compromise.
4. Estimate tax impact: Remember, interest and penalties usually continue in CNC; forgiven debt under settlement can trigger taxable income.
5. Get legal help: When enforcement is active, tax debt is large, or tax consequences are uncertain, engage an IRS tax attorney to assemble the financial package properly and negotiate with the IRS.

When to call the Law Offices of Nick Nemeth

If any of the following apply, contact us immediately: you received a levy notice, a lien has been filed, refunds are being offset, you face serious medical or job-loss hardship, or your case involves substantial tax debt. We will review your documents, advise whether CNC or another IRS hardship program is the right route, and take urgent steps to protect your income and assets.

How We Decide Which Hardship Option to Pursue

At the Law Offices of Nick Nemeth, we evaluate:

1. Immediate enforcement risk (is a levy or lien imminent?),
2. Short-term ability to pay (can you manage monthly payments?), and
3. Long-term collectibility (do assets or future income make full recovery likely?).

Based on this analysis and other factors, we recommend CNC, an installment agreement, an Offer in Compromise, innocent spouse relief, or something else.

Practical documentation checklist (one place to copy)

If you are facing enforcement or believe you qualify for hardship relief, contact the Law Offices of Nick Nemeth. We will review your documents, file the required forms, and negotiate with the IRS to obtain the most protective remedy available under the hardship rules.

• Recent tax returns (last 2–3 years)
• IRS notices and account transcripts
• Most recent bank statements (3–6 months)
• Pay stubs, unemployment or disability statements, pension statements
• Monthly household budget with essential expenses documented
• Business profit/loss statements, bank records, and payroll reports (for business matters)
• Medical bills, layoff notices, foreclosure/eviction notices, or other evidence of hardship

What Happens if You Don’t Qualify for the IRS Hardship Program?

If the IRS denies CNC or other hardship relief, it is not the end of the line. A denial simply means the IRS concluded you have some ability to pay under its rules. From that point, there are several practical, legal routes to protect your income and reduce the overall burden – but timing and documentation matter.

Immediate consequences of a denial

• Collections continue. The IRS may proceed with enforced collection actions such as levies, bank levies, wage garnishments, or continued offsets of refunds.
• Interest and penalties continue. A denial does not stop accrual of interest and most penalties.
• You keep options. A denial does not prevent you from applying for other relief (installment agreement, Offer in Compromise) or from appealing the decision.

Practical next steps you should consider right away

• Request an appeal or Collection Due Process (CDP) hearing if you received a Notice of Federal Tax Lien or a levy: appeals can pause collection in many cases and give you a formal forum to contest the IRS determination.
• Apply for an installment agreement if even a modest monthly payment is possible. A properly structured installment plan will usually halt levies and provide breathing room while you pay.
• Prepare an Offer in Compromise (OIC) if your reasonable collection potential is genuinely low; an OIC can settle the debt for less than the balance, but it requires full disclosure and strong documentation.
• Request penalty abatement if penalties caused the balance to balloon, and you have reasonable-cause support (medical emergency, natural disaster, reliance on erroneous professional advice, etc.).
• Seek temporary levy relief with help from a reputable attorney. They can request emergency levy releases when essential income or living needs are at stake while a longer-term solution is put in place.
• Evaluate bankruptcy as a last-resort option when debts and enforcement threaten insolvency. Bankruptcy may stop collection and discharge certain tax debts under narrow rules.

Why professional help may change the outcome

• Form and substance matter. The IRS evaluates finances according to prescribed formats and allowances. An experienced tax attorney assembles the financial package correctly, so the IRS sees the real ability to pay.
• Appeals and procedural remedies. Lawyers know when to invoke CDP rights, when to file appeals, and how to preserve statutory defenses that an unrepresented taxpayer might waive.
• Negotiation leverage. Counsel negotiates directly with revenue officers, proposes realistic payment structures, and can obtain emergency relief that ordinary taxpayers rarely secure on their own.

Quick action checklist if denied

1. Do not ignore IRS notices. Open and respond.
2. Gather current financials: bank statements, pay stubs, budget, and asset lists.
3. Ask your attorney to request a stay or emergency levy release if enforcement is active.
4. Explore installment agreement or OIC options with counsel.
5. Preserve appeal rights and request a CDP hearing if appropriate.

If the IRS has denied your hardship claim or you face imminent enforcement, contact the Law Offices of Nick Nemeth immediately. We will review the denial, identify appeal and negotiation paths, seek emergency relief when needed, and implement a debt-resolution strategy tailored to your circumstances.

IRS Hardship Refund Request and Form 8944: Clearing Misconceptions

1. Hardship Refund Request

For taxpayers who owe only federal tax debts and would face significant financial hardship if their refund is offset, there is a potential remedy: the Offset Bypass Refund (OBR). An OBR allows qualifying taxpayers to receive their refund despite an outstanding balance. 

Key points to know:

1. An OBR must be approved before the refund is offset, so the request is typically made before filing a tax return.
2. The Taxpayer Advocate Service (TAS) reviews whether you meet hardship criteria and may assist in submitting the request.
3. An OBR does not erase the tax debt—it only bypasses the offset to relieve immediate hardship.

This option can be critical for taxpayers relying on their refunds to meet essential expenses such as housing, utilities, or medical costs.

2. Form 8944 is not a taxpayer hardship or refund request.

It is a preparer form used by specified tax return preparers to request an undue hardship waiver from the IRS electronic-filing mandate. It does not stop collection activity, request CNC status, or substitute for the financial statements the IRS uses to evaluate taxpayer hardship.

What Form 8944 actually does

• Who files it: A specified tax return preparer (not the taxpayer) who claims that complying with the e-file requirement would cause undue hardship.
• Why it exists: The IRS requires many preparers to file covered returns electronically; Form 8944 lets a preparer ask the IRS for a one-year waiver when e-filing would be an undue burden. Approved waivers are issued on a case-by-case basis and are usually valid for one calendar year.
• Timing and processing: Preparers generally must submit Form 8944 within the IRS-specified window (typically the months before and during filing season) and allow several weeks for processing. The IRS publishes instructions and processing rules for waiver requests.

What Form 8944 is not

• It is not the form a taxpayer uses to request Currently Not Collectible (CNC) status, a hardship pause on collections, an Offer in Compromise, or a refund offset review. Taxpayers seeking relief from collection must use financial disclosure forms (for example, the Forms 433 series), apply for installment agreements, request CNC through IRS procedures, or submit an Offer in Compromise where appropriate. Relying on Form 8944 for collection relief is a common source of confusion.

Watch out for scams and misinformation

Because Form 8944 contains the word hardship, some fraudulent actors misrepresent it as a way for taxpayers to avoid paying taxes or stop levies. Filing false information can produce civil or criminal penalties. If you are being told to submit Form 8944 to stop collection or erase tax debt, treat that as a red flag.

Practical guidance

• If you are a tax preparer and face a genuine inability to meet e-file requirements, follow the Form 8944 instructions and submit during the required filing window. Keep documentation that supports the undue-hardship claim.
• If you are a taxpayer seeking hardship relief from the IRS, do not use Form 8944. Instead, assemble your financial records, consider Forms 433-F/433-A (or other IRS financial statements), and evaluate CNC, installment agreements, penalty abatement, or an Offer in Compromise. A tax attorney can help package the documentation the IRS expects and recommend the best administrative path.

If you are confused by solicitations mentioning Form 8944 or need help preparing a legitimate hardship package for the IRS, contact the Law Offices of Nick Nemeth. We will review your notice, explain which forms actually apply to your situation, and represent you with the IRS to pursue CNC, installment agreements, Offers in Compromise, or other appropriate relief.

How Does the IRS Hardship Program Affect a Non-Filing Spouse?

When one spouse has not filed the required tax returns, the family’s options for IRS hardship relief become more complicated. Here are the key points every non-filing spouse should understand, presented clearly and actionably.

Joint liability versus individual relief

• Filing a joint return makes both spouses jointly and severally liable for the tax on that return. The IRS can attempt to collect from either spouse.
• Hardship remedies such as CNC status or an installment agreement are generally applied to the taxpayer who is the subject of collection. If liability is joint, the IRS will consider both spouses’ financial circumstances when evaluating collectibility.

Why filing status matters

• The IRS usually requires that all required returns be filed before granting CNC, an Offer in Compromise, or most installment agreements. Unfiled returns block relief in many cases.
• If a spouse has not filed, that spouse should consider filing delinquent returns promptly, so relief requests can be considered on complete information.

Options for the non-filing spouse

• File the missing returns: This is often the first and most important step. Filing provides the financial record the IRS needs to evaluate hardship and can prevent additional penalties for failure to file.
• Innocent spouse relief or separation of liability: If the unpaid tax results from the other spouse’s omissions, the non-filing spouse may be eligible for innocent spouse relief or separation of liability. These are fact-intensive administrative remedies that can remove or limit liability.
• Individual relief: In some cases the non-filing spouse can pursue CNC, an installment agreement, or an Offer in Compromise on their own earnings and assets, particularly if community or joint assets are not available to satisfy the debt.

Practical steps to protect yourself

1. Bring filing current: Prepare and file all required delinquent returns.
2. Gather documentation: Pay stubs, bank statements, bills, and records that show income and essential living expenses.
3. Evaluate innocent spouse options: If the tax liability was caused by the other spouse’s actions, document your lack of knowledge and financial separateness.
4. Avoid joint payment or quick settlements without counsel: Making payments or signing agreements can affect later rights to innocent spouse relief.
5. Consider separate representation: A tax attorney can represent you individually and protect your legal rights without creating conflicts.

Why you should consult a tax attorney

The interaction between filing status, joint liability, and hardship relief is technical and outcome-determinative. Attorneys at the Law Offices of Nick Nemeth review your filing history, file missing returns if appropriate, evaluate innocent spouse eligibility, and negotiate with the IRS to protect your income and assets. 

Finding a Tax Lawyer for IRS Hardship

When your case involves the IRS hardship program or other tax relief, choosing the right tax lawyer matters. Attorneys such as those at The Law Offices of Nick Nemeth know the IRS procedures for CNC, installment agreements, Offers in Compromise, penalty abatement, and appeals. They also know how to stop or minimize enforcement actions such as levies, wage garnishments, and refund offsets. Below is a practical guide to finding and working with a tax lawyer who can handle IRS hardship matters.

Why hire a tax attorney

A tax attorney combines legal privilege, courtroom authority, and negotiation experience. Attorneys prepare the financial package the IRS expects, file Form 2848, so the IRS communicates through counsel, request emergency levy releases when needed, and, if required, pursue administrative appeals or litigation. For complex cases or large balances, attorney involvement usually preserves more relief options and reduces procedural risk.

What to look for

• Relevant experience: Look for experience specifically with CNC, Offers in Compromise, installment agreements, penalty abatement, and Collection Due Process hearings.
• IRS practice familiarity: The lawyer should regularly negotiate with revenue officers and appeals personnel. Local knowledge of IRS exam and collection practices in the Dallas region is helpful.
• Litigation capability: If appeals or Tax Court litigation could be necessary, confirm whether the attorney can handle those matters.
• Transparent fees: The firm should provide clear information about the fee structure, whether fixed for specific services or hourly for complex representation.
• Client communication: Ask how the attorney will keep you updated and who will be your primary contact.

The Law Offices of Nick Nemeth meets these criteria, with seasoned IRS negotiation, Tax Court capability, clear fees, and a single point of contact.

Questions to ask during an initial call

• Have you handled CNC or hardship cases like mine?
• How would you approach stopping a levy or garnishment immediately?
• Do you file Form 2848 so you can represent me directly?
• What documents do you need from me, and how long will it take to assemble them?
• How do you bill, and what is your fee estimate for the likely scope of work?
• What outcomes should I reasonably expect, and what are the risks?

Documents to bring to your first meeting

• Most recent IRS notices and account transcript, if available
• Last 2 to 3 years of federal tax returns
• Recent bank statements and pay stubs, or business financials if self-employed
• Evidence of essential monthly expenses, medical bills, layoff notices, or other hardship documentation
• Any prior correspondence with the IRS, lien or levy notices, and collection letters

Typical process and timeline

1. Initial confidential consultation and file intake.
2. Engagement agreement and, where appropriate, filing Form 2848.
3. Assemble financial package (Forms 433 series or equivalent, supporting documents).
4. Request immediate relief if enforcement is active, then negotiate CNC, installment plan, or OIC.
5. Monitor compliance and handle appeals if needed.

Timelines vary, from days for emergency levy relief to months for OIC review. Installment agreements are often faster than OICs.

Fees and payment expectations

Fees depend on complexity. Some tasks may be capped or quoted as a flat fee, such as preparing an OIC package or filing for CNC relief. Ongoing negotiations, appeals, or litigation are often hourly or based on retainers. Always get a written fee agreement that explains services and costs. At the Law Offices of Nick Nemeth, fees are quoted upfront in writing, flat when possible, and retainer based when needed.

Take Control of Your Tax Hardship Now: Contact the Law Offices of Nick Nemeth

If IRS notices, levies, or mounting tax debt are keeping you up at night, you do not have to face them alone. At the Law Offices of Nick Nemeth, our tax attorneys help clients across Dallas, Fort Worth, and Frisco secure CNC status, negotiate installment agreements, prepare Offers in Compromise, request penalty abatement, and obtain emergency levy relief.

Ready to begin? Call (972) 426-2944 or complete our contact form to schedule a consultation. We will review your notices, explain realistic options, outline fees, and map the likely timeline to protect your income and assets.

FAQs:

Can I apply for the Hardship Program on my own?

Yes. Taxpayers can request hardship relief directly with the IRS by submitting complete financial documentation. However, properly preparing the financial package and identifying the best remedy takes experience. If enforcement is active or the case is complex, legal representation increases the odds of timely relief.

How long does the Hardship Program last?

CNC status and other hardship remedies are generally temporary and subject to periodic IRS review. The IRS may re-evaluate your financial condition and resume collection if circumstances improve. The exact review schedule varies by case.

Do IRS Hardship relief programs like the CNC affect my credit score?

CNC status itself is an IRS administrative status and does not directly create a new public record on your credit report. However, actions that preceded the hardship request, such as liens or accounts sent to collection, may already affect credit. Settlement or bankruptcy options have more direct negative credit consequences.

What if my hardship application is denied?

A denial is not the end of the road. You can appeal the decision, request a Collection Due Process hearing if applicable, propose an installment agreement, prepare an Offer in Compromise if collectibility is low, or seek emergency levy relief. Timely legal help is important after a denial.

Can I apply for hardship for business taxes?

Yes. Businesses can be evaluated for hardship based on cash flow, payroll needs, and the realistic ability to continue operations. Business hardship claims require detailed financials such as profit and loss statements, cash-flow reports, and payroll records.

Can my hardship status be revoked?

Yes. If your financial situation improves or the IRS receives new information indicating you can pay, the IRS can end CNC or other temporary relief and resume collection.

Will the IRS continue to charge interest and penalties during the Hardship Program?

Generally, yes. Interest and certain penalties continue to accrue on unpaid tax balances even while collection actions are suspended under CNC. That is one reason to evaluate whether CNC, an installment agreement, or an Offer in Compromise best serves your long-term interests.

Can the IRS seize my assets while I am in the Hardship Program?

If CNC is approved, most aggressive enforcement actions, such as levies and garnishments, are paused. However, if CNC is not in place or is later revoked, the IRS can pursue levies, liens, or other collection remedies. Also note that refunds or refundable credits may still be applied to the tax debt.

Can I negotiate a reduced tax debt amount through the Hardship Program?

The hardship pathway itself pauses collection when you cannot pay. To settle for less than the balance, you must pursue an Offer in Compromise. CNC can provide breathing room while an OIC package is prepared, but they are separate remedies with different standards.

Can I have my tax refunds applied towards my outstanding tax debt while in the Hardship Program?

Yes. Even if CNC is in place, the IRS can still offset refunds or refundable credits against outstanding liabilities. CNC pauses enforced collections such as levies, but does not guarantee refunds will be released.

Can I qualify for the Hardship Program if I am self-employed?

Yes. Self-employed taxpayers are evaluated based on documented cash flow, allowable business and personal living expenses, and available assets. Because income can vary, careful documentation is essential.

What documentation do I need to provide for the Hardship Program application?

Typical documentation includes recent tax returns, bank statements, pay stubs or income statements, a monthly budget of essential expenses, lists of assets and debts, medical bills or layoff notices if relevant, and business financials for business taxpayers.

Can the Hardship Program provide relief for both federal and state tax debt?

The IRS Hardship pathways apply to federal tax debt. State taxes are governed by state tax authorities and their programs. You should coordinate federal and state strategies, and an experienced attorney can help integrate both when necessary.

Can the Hardship Program help with business-related tax debt?

Yes. For businesses, the IRS will consider whether collection would force layoffs, bankruptcy, or cessation of operations. The analysis focuses on cash flow and the practical ability to pay without harming employees or critical creditors.

Can the IRS terminate the Hardship Program if my financial situation improves?

Yes. The IRS periodically reviews hardship statuses and will resume collection if it determines you now have the ability to pay.

Where can I find trusted IRS hardship help near me in the Dallas–Fort Worth area?

For tailored, attorney-led assistance in Dallas, Fort Worth, or Frisco, contact the Law Offices of Nick Nemeth. We review hardship eligibility, assemble the financial package the IRS expects, pursue emergency levy relief when necessary, and coordinate CNC, installment agreements, Offers in Compromise, or appeals.

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