Free Hardship Letter for Tax Debt Sample

1. What is a hardship letter for tax debt?

Answer: A hardship letter for tax debt is a letter that explains your financial situation and requests relief from paying a tax debt. It should include information about your income, expenses, and assets, as well as a detailed explanation of why you are unable to pay the debt.

2. What information should be included in a hardship letter for tax debt?

Answer: A hardship letter should include your personal information, the amount of tax debt you owe, your current income and expenses, the reason for your financial hardship, any efforts you have made to pay the debt or sell assets, and a proposed plan for making payments.

3. How do I write a hardship letter for tax debt?

Answer: When writing a hardship letter, be sure to use a professional tone and provide specific details about your financial situation. Start by providing your personal information and the amount of tax debt you owe. 

Then, explain the reason for your financial hardship and provide information about your income and expenses. 

Next, describe any efforts you have made to pay the debt or sell assets. Finally, propose a plan for making payments, such as a monthly payment plan.

4. What should I do after sending a hardship letter for tax debt?

Answer: After sending a hardship letter, you should wait for a response from the tax authority. They may ask for additional information or documentation to support your claim of financial hardship. 

Be sure to respond promptly to any requests for information and provide all requested documentation. It’s also important to continue making payments on your tax debt if possible, as failure to do so may result in additional penalties and interest.

5. Can a hardship letter for tax debt stop wage garnishment?

Answer: A hardship letter may help to stop wage garnishment by providing evidence of financial hardship to the tax authority and proposing a plan for making payments. However, it’s important to note that wage garnishment may continue until the tax debt is paid in full or a payment plan is agreed upon.

6. Will the IRS accept my hardship letter for tax debt?

Answer: The IRS may consider a hardship letter for tax debt but ultimately the decision is based on the individual case and the IRS’s analysis of the provided information. 

It’s important to provide accurate and complete information in your hardship letter and to respond promptly to any requests for additional information.