Financial hardship is a term used to describe the inability of an individual taxpayer to pay their taxes. It is difficult to prove to the Internal Revenue Service that you are struggling financially and therefore do not have the means to pay the required taxes that you are legally bound to pay. The IRS will likely continue to contact you to determine how you will pay these taxes. Back taxes are often the result of financial hardship. This means that the individual has failed to make their tax payments and no owes taxes to the government. Financial hardship, though difficult to prove, is often a reason to describe why you have fallen behind in your tax payments.