The Situation
Nadia, a single mother with two children, faced a $26,400 federal tax balance after hours reduced to part-time after an employer restructuring. Available cash was needed for ordinary, necessary living costs, making even a small collection payment difficult at the time.
The Resolution Strategy
The team organized pay stubs, childcare costs, and bank activity and evaluated whether paying the IRS would prevent the taxpayer from meeting reasonable, basic living expenses. The request focused on Currently Not Collectible hardship treatment and disclosed all income and assets. This scenario describes a pause in most collection activity, not a cancellation.
The Outcome
The outcome is that the IRS records the account as Currently Not Collectible and temporarily suspends most collection actions while hardship persists. The $26,400 balance is not forgiven, and interest and penalties can continue. Collection can restart after financial circumstances change.
Names have been changed and photos are representative stock images used to protect client privacy. This case describes an individual situation. Eligibility and outcomes depend on each taxpayer's circumstances, are not typical or guaranteed, and past results do not predict future outcomes.
