As the U.S. economy continues to languish, some taxpayers who owe the IRS back taxes are facing their own financial hardships. For many, simply paying the monthly bills is a difficult task, so repaying back tax debt can be almost impossible on their current income. Unfortunately, the IRS is legally entitled to pursue payment for outstanding taxes, regardless of the current circumstances of the individual who owes the debt. If you owe back taxes and you're facing financial hardship, one of the ways you may be able to get some tax relief is to qualify for temporarily uncollectible status with IRS agents. If you qualify, the IRS will stop pursuing you for your back taxes immediately.

What Constitutes a Hardship?

The sticking point for this provision is understanding what constitutes a hardship. Simply losing income may not enough to grant you this provision and falling below the poverty line doesn't let you off the hook for your tax bill either. The only way you can make a case for your hardship circumstances is to prove that attempting to repay your tax debt at this time would be an "undue" hardship on you or your family. You'll need documentation to back up this claim as well. For example, if you owe outstanding medical bills that are putting on a strain on your finances, you would need to provide proof of those bills, as well as your current income and household expenses.

Making Your Case

Regardless of your circumstances, though, it's best not to attempt to claim the temporarily uncollectible status without seeking the assistance of a qualified tax resolution specialist. The IRS routinely denies these requests and only about 25 percent of the claims are approved. A skilled tax attorney, however, can help you to assess your situation to find out if your petition is likely to be granted. If so, the attorney can help you put together a convincing argument that may make it more likely for your request to be processed.

Other Tax Resolution Options

If you don't qualify for this status, there are other options you can use to ease your tax burden. Repaying your debt in installments may help; since you can decide how much you want to pay each month and what day you'll submit the payment. Another option is seeking relief through a lump-sum compromise payment. This provision allows settling your outstanding tax debt for a fraction of the balance due as long as you make the payment in a lump sum.

Whether you qualify for temporarily uncollectible status with IRS representatives or not, you can find solutions that will help you manage your tax troubles and regain your financial footing.