Financial Hardship
What the IRS means by hardship, who decides it, and what it does and does not stop.
The thing most worth knowing
Hardship is a determination the IRS makes, not a status you file for. Its definition is built around that: "An economic hardship occurs when WE HAVE DETERMINED the levy prevents you from meeting basic, reasonable living expenses." There is no hardship form. The work is supplying what the IRS needs to reach the conclusion, and the IRS states it "will usually need you to provide financial information so be prepared to provide it when you call".
What this covers
- The IRS definition of economic hardship, and whose determination it is
- The must/may distinction between releasing a wage levy and releasing a bank levy
- Currently Not Collectible status, and the three things the IRS states continue in it
- What the IRS asks for before it will make the determination
This page routes. It does not repeat what the pages below already say, and it does not tell you which situation you are in.
Questions this raises
Does hardship stop a levy?
It depends which levy, and the IRS uses two different verbs in consecutive sentences. "If the levy on your wages is creating an immediate economic hardship, the levy MUST be released. If the levy on your bank account or other account is creating an immediate economic hardship, the levy MAY be released."
Does Currently Not Collectible mean the debt goes away?
No. The IRS states on LT39 that CNC status "doesn't stop penalties and interest from being charged and it doesn't mean the debt goes away - it means the IRS has determined you can't afford to pay the debt at this time." It also states it will apply any federal tax refund you are due to the debt, and may file a Notice of Federal Tax Lien.
Do I have to fill in a form to ask?
The IRS states a temporary delay of collection is requested by telephone — 800-829-1040 or the number on your bill or notice — and that before approving one it may ask for a Collection Information Statement on Form 433-F, 433-A or 433-B, with documents verifying income, monthly living expenses, bank accounts and assets.
Does a levy release mean I no longer owe it?
No. The IRS states directly: "A levy release does not mean you are exempt from paying the balance." It states it will work with you to establish a payment plan or take other steps toward the balance.
Notices that arrive in this situation
Options the IRS publishes
Listed because they relate to this situation, not because any of them applies to you. That is the IRS’s determination on your full financial position.
The vocabulary
What this page does not say
- The IRS does not publish the allowable living expense standards it applies when making the determination in the material read for this hub. This site publishes no figures for them, and the calculator constants that once stood in for them are recorded as ours rather than the IRS's.
Sourced to primary IRS materials and editorially reviewed. Not reviewed by a tax professional. Not tax advice. Every fact on this page comes from a linked record that carries its own sources and review date.