Question

short note on economic hardship

Answer 1

The government is stepping in, recognizing their economic hardship, and paying the interest on their loan for that period.

The economic hardships she observed at that timewere similar to some of what she saw today.

Answer 2

The definition of economic hardship is derived from Treasury Regulations § 301.6343-1. An Economic hardship occurs when a taxpayer is unable to pay reasonable basic living expenses.

The determination of a reasonable amount for basic living expenses will be made by the Internal Revenue Service and will vary according to the unique circumstances of every individual taxpayer.

Unique circumstances, however, do not include the maintenance of an affluent or luxurious standard of living. The IRS in accordance with the United States Departmental of Labor have set up platforms to determine these hardship and living standards.

These standards are also being used by the United States Department of Justice in the normal course of U.S. bankruptcy proceedings.Because economic hardship is defined as the inability to meet reasonable basic living expenses, it applies only to individuals (including sole proprietorship entities).

Compromise on economic hardship grounds is not available to corporations, partnerships, or other non-individual entities.

The taxpayer’s financial information and special circumstances must be examined and fully documented to determine if they qualify for an economic hardship.