Economic Hardship

Full Definition

Economic hardship is the IRS's own term and it comes with a definition: "An economic hardship occurs when we have determined the levy prevents you from meeting basic, reasonable living expenses."

Note who determines it. The sentence is built around "we have determined", and the same framing appears everywhere the concept is used — Publication 594's statement that the IRS cannot issue a new levy where IT AGREES you are unable to pay due to economic hardship, and the CNC page's statement that before approving a temporary delay it may ask for financial information.

It is not a form you file. It is a conclusion the IRS reaches, and the practical work is supplying what it needs to reach it. The IRS states that to determine whether a levy is causing hardship it "will usually need you to provide financial information so be prepared to provide it when you call".

What it produces depends on what it is applied to. On a wage levy the IRS states the levy MUST be released where hardship is immediate; on a bank or other account it states the levy MAY be released. On collection generally it can produce Currently Not Collectible status.

And what it does not do: the IRS states a levy release "does not mean you are exempt from paying the balance", and that CNC status does not stop penalties and interest or make the debt go away.

Sources

• What if a levy on my wages, bank or other account is causing a hardship? — Internal Revenue Service, retrieved 2026-08-21
• Temporarily delay the collection process — Internal Revenue Service, retrieved 2026-08-21

Last reviewed 2026-08-21 by Tax Resolution Clarity editorial.