Can Tragedy Save You From the IRS?

Chad Dickinson • March 13, 2025
Life has a way of throwing unexpected challenges our way — medical emergencies, divorce, job loss, the death of a loved one, and natural disasters. When you’re facing one of these major life events, the last thing you want to worry about is dealing with the IRS. But here’s the tough truth: personal tragedy doesn’t always help when it comes to your IRS case.

In this video, Chad Dickinson from Arch Tax breaks down how personal hardship affects your ability to work with the IRS — and what you need to prove to actually qualify for hardship relief. Watch the video below to get the full story:

How the IRS Defines Hardship

The IRS does have provisions for financial hardship, but they’re not based on the emotional toll of your life circumstances — they’re based on numbers.


Income-to-Expense Ratio – The IRS will examine whether your income is enough to cover basic living expenses. If your income exceeds what the IRS considers reasonable for necessities, they may not consider you to be in hardship.


Ability to Earn – Even if you’ve experienced a traumatic life event, the IRS will want to know if you’re still capable of working and generating income. If you can still earn a living, you may not qualify for hardship relief.


Assets You Own – The IRS will look at the type and value of your assets. If you have substantial savings, property, or investments, the IRS may expect you to use those resources to settle your tax debt before considering hardship relief.



Why Tragedy Alone Won't Save You

This is the part that can feel cold and unfair. Even if you’ve experienced an unspeakable tragedy — like the loss of a loved one or a severe medical diagnosis — the IRS won’t offer you relief unless you can prove that the situation directly impacts your ability to pay.


Example:

  • If you lost your job due to a medical issue and your income dropped significantly, you might qualify for hardship relief.
  • If you lost a loved one but your income remains stable, the IRS will likely expect you to pay your tax debt as usual.


How to Prove Hardship to the IRS

If you believe you qualify for hardship relief, you need to provide clear evidence:



  • Bank statements showing reduced income
  • Medical records if your condition prevents you from working
  • Proof of increased living expenses due to your situation
  • Asset valuation statements

When to Seek Professional Help

If you’ve experienced a major life event and are struggling to deal with the IRS, you don’t have to go through it alone. At Arch Tax, we specialize in helping clients navigate complex IRS cases — including hardship situations.


Contact us today to schedule a consultation and see how we can help you get the relief you need.

What does the IRS know about me?

What Does the IRS Know About Me?

By Chad Dickinson • April 24, 2025
Think the IRS only knows what you put on your tax return? Think again. Discover what data the IRS collects—and why it matters for your taxes, your identity, and your future.
Owe the IRS but can't pay?

Owe the IRS But Can’t Pay? Here’s What Happens Next

By Chad Dickinson • April 18, 2025
Owe the IRS but can’t afford to pay? Learn what really happens, what to expect, and the options available to avoid penalties, garnishments, and stress.
Is the IRS going to take my refund?

Is The IRS Going To Take My Refund?

By Chad Dickinson • April 10, 2025
Worried the IRS might take your tax refund? Learn the top reasons refunds get seized—and what you can do to protect your money.

Tax Scams People Fall For Every Year

By Chad Dickinson • April 3, 2025
Tax season is stressful enough without worrying about scammers. Every year, thousands of people lose money, compromise personal information, or even wind up with IRS trouble because of fraudulent schemes. Below are three of the most common scams, updated with the latest twists and tactics criminals use today.
How to Avoid Delays from IRS Identity Checks

How to Avoid Delays from IRS Identity Checks

By Chad Dickinson • March 27, 2025
Identity theft continues to be a major concern during tax season, and the IRS has taken steps to protect taxpayers through increased identity verification procedures. While these efforts help reduce fraud, they can also delay your refund if your return gets flagged. In this post, we’ll explain what triggers these IRS identity checks, how to respond if it happens to you, and the simple steps you can take now to avoid delays altogether. Watch the below video for a quick explanation:

Unlock Easy Access to the IRS with an ID.me Account

By Chad Dickinson • March 20, 2025
What is an ID.me Account?

Self-Employed? Avoid a Huge Tax Bill with Estimated Tax Payments!

By Chad Dickinson • March 6, 2025
If you’re self-employed or earning income without tax withholding, you could be in for a big surprise at tax time! Without making Estimated Tax Payments (ETPs) throughout the year, you may owe more than expected—plus potential IRS penalties. The below video explains what Estimated Tax Payments are:
401(K) Early Withdrawals: How to Avoid IRS Penalties.

401(k) Early Withdrawals: How to Avoid IRS Penalties!

By Chad Dickinson • February 27, 2025
If you're considering withdrawing money from your 401(k) retirement account, you may be in for a costly surprise when tax season rolls around. Read this article and learn how to be prepared.

Divorced? Here’s How to Handle IRS Joint Tax Debt!

By Chad Dickinson • February 20, 2025
If you’ve gone through a divorce and still have IRS tax debt from a joint return, you might be wondering what happens next. Does your divorce decree protect you? Can the IRS come after you for the full amount? What steps should you take to separate your liability from your ex-spouse? In this blog, we’ll cover what you need to know about handling joint tax debt after a divorce and how you can protect yourself from unwanted tax liabilities.

Can You Deduct Medical Expenses on Your Taxes?

By Chad Dickinson • February 12, 2025
Want to save money on your taxes? If you’ve had significant out-of-pocket medical expenses, you may be eligible for a tax deduction—but only if you meet specific IRS requirements. In this guide, we’ll break down which medical expenses qualify for deductions, what doesn’t, and how to properly claim them on your tax return. Watch the video below for a quick explanation:
More Posts