Navigating IRS Wage Levy and Hardship in Bergen-Passaic, New Jersey

When the IRS assesses your ability to pay a tax debt, they utilize a detailed financial analysis process involving Form 433-A, 'Collection Information Statement for Wage Earners and Self-Employed Individuals.' This form captures your income, expenses, and assets to determine your disposable income, which is the amount available for tax payments. The IRS calculates allowable expenses based on National and Local Standards, ensuring a taxpayer can meet basic living needs. For a single individual in Bergen-Passaic, New Jersey, the National Standard for food, clothing, and other necessities is $812 per month, while a family of four is allocated $1983. These figures are derived from Bureau of Labor Statistics (BLS) Consumer Expenditure Survey data. While specific local housing standards are not published for the Bergen-Passaic, NJ HUD Metro FMR Area by the IRS, the agency considers actual necessary expenses. If your essential living expenses exceed your income, the IRS may determine that an economic hardship exists, potentially leading to a levy release under Internal Revenue Code (IRC) §6343(a)(1)(D). This critical data is sourced directly from IRS.gov Collection Financial Standards, BLS, and US Census Bureau information.

For taxpayers in the Bergen-Passaic, NJ HUD Metro FMR Area, the IRS does not publish a specific local standard for Housing & Utilities, leaving these fields as $N/A in their official Collection Financial Standards. In such cases, the IRS evaluates your actual necessary housing expenses for reasonableness. This is where the Department of Housing & Urban Development (HUD) Fair Market Rent (FMR) data becomes crucial. For instance, the HUD FY2025 FMR for a 2-bedroom residence in this area is $2400.0 per month. If your actual rent or mortgage payment aligns with or is below the HUD FMR, it significantly strengthens your argument that your housing costs are reasonable and necessary. Should your necessary housing expenses exceed what the IRS might typically allow, you can request a deviation from the standard, as outlined in Internal Revenue Manual (IRM) 5.15.1.10. This deviation process allows the IRS to consider higher actual expenses if adequately justified, especially when local benchmarks like HUD FMR demonstrate the prevailing costs. While regional Shelter CPI data for this specific area is not available, the high HUD FMR figures indicate significant housing costs, reinforcing the need for individualized expense consideration.

Beyond housing, the IRS allows for essential living expenses across several categories. The National Standards for Food, Clothing, and Other items provide a baseline: a single person in Bergen-Passaic, New Jersey, is allowed $812 per month, while a family of four receives $1983. These amounts are meticulously calculated from the Bureau of Labor Statistics Consumer Expenditure Survey. For healthcare, the National Standards for Out-of-Pocket Healthcare permit $75 per person per month for individuals under 65 and $153 for those 65 and over, derived from the Medical Expenditure Panel Survey. For transportation in the Bergen-Passaic, NJ HUD Metro FMR Area, the IRS Local Standards are critical. A taxpayer owning one car is allowed $588 for ownership costs and an additional $270 for operating costs, totaling $858 per month. For two cars, the allowance is $1176 for ownership, plus the $270 operating cost for the region, totaling $1446. These transportation figures are based on BLS data and American Automobile Association operating costs, ensuring they reflect regional realities.

Achieving Currently Not Collectible (CNC) status in New Jersey means the IRS has determined you lack the financial ability to pay your tax debt due to economic hardship. To qualify, you must file a comprehensive Form 433-A, 'Collection Information Statement for Wage Earners and Self-Employed Individuals,' detailing all income, assets, and necessary living expenses. The IRS then compares your total allowable expenses against your total income. For example, a single filer in Bergen-Passaic with no published housing standard might use the HUD FMR for a 1-bedroom unit at $2090.0, combined with National Standards for food ($812), healthcare ($75 for under 65), and local transportation ($858 for one car ownership and operating). This totals $3835.0 in essential monthly expenses. If your gross monthly income is less than this total, you may qualify for CNC. Internal Revenue Manual (IRM) 5.16.1 outlines the procedures for CNC determinations, and if approved, the IRS will generally cease enforced collection actions, including releasing a levy under IRC §6343. It is crucial to understand that CNC status does not forgive the debt; instead, it pauses active collection while the 10-year Collection Statute Expiration Date (CSED) continues to run under IRC §6502. This means that while you are in CNC, the clock is still ticking on the IRS's ability to collect, potentially leading to the expiration of the debt.