Can't Work? If you're disabled and can't work, the last thing you need is an IRS Tax Debt to add to your troubles.
If your only income is a disability check, how can you pay your sky high IRS debt? Sorry to say it, but as long as you have income, the IRS wants a piece of it.
But there are ways to keep the IRS Hitman from calling.
Here's some solutions for those who are on disability: Hardship Status: One of the best solutions for you is to let the IRS know you are in a Hardship Status.
This is also known as "Suspended Collections.
" Basically, it means you are in a bad financial situation and cannot afford to pay your debt in full.
The IRS will stop their collections actions for a certain amount of time until you can pay on your debt.
Qualifying: You have to prove to the IRS that your only income is your disability.
In addition to that, you have to prove that your disability only covers your basic needs.
Show them that your disability check only covers rent, food, clothing, and transportation.
Then provide plenty of documents supporting your case.
The Pitfalls: Double check all the information you send to the IRS.
Make sure it's all right before you continue.
The IRS can garnish up to 15% of your disability check, making things even harder on you.
If you are not sure about what to do I suggest you seek help from a reliable, knowledgeable tax professional.
Permanent Disability: If you are Permanently disabled, you may qualify for Currently Not Collectible status.
This means the IRS will not collect on your debt for the whole time you cannot pay.
This status will remain in effect even after you return to work.
Final Warning: If you are in Currently Not Collectible or Hardship Status, the IRS will still check up on you every few months.
They will ask if your financial situation has improved.
Be careful what you say.
The IRS will resume their collection efforts if they find you can pay your debt in any way.
Now You Have The Smoking Gun...
Use it!