Essentially, you will prove your financial hardship with the documentation which supports the entries you provide on the Form 433A which the IRS will request of you. This information can be used for a Penalty Abatement Request, to prove Uncollectible Status or to induce acceptance of an Offer in Compromise.
For starters, you must diligently pour over every entry on the Form 433A for accuracy and currency. Pay particular attention to page 4, where you are required to show your current income and expenses. For wage earners, the pay stubs will show current income and perhaps some of the expenses as well. For Self-employed taxpayers you will have to complete Form 433B or pages 5-6 on the Form 433A disclosing your business income and expenses.
For each of these forms, TaxHelp has designed a Webinar to help you advance your interests. You will learn how to complete these forms to your advantage.
But, there is more to fighting the IRS than just completing their forms. You must also get other evidence to support your hardship. If you've been involved in an accident or have some on-going illness, obtain all the medical reports and records. The medical reports can be used to support a finding of Hardship as well as a Penalty Abatement Request. Please obtain all doctor, psychologist, surgeon or other medial practitioner's reports detailing the problems, diagnosis and prognosis.
It would help to obtain evidence of other tragic life events: Divorces, Bankruptcies, Criminal actions, Deaths and Illnesses. Go into great detail about these events and how disruptive they were in your life. You need to provide an excuse why you failed in your duty to the IRS and why you can't pay right now.
So, the best advice is to gather all your supporting documentation and bring it into this office. We will construct a proper Action Plan to win against the IRS!
J. David Hopkins