Buffalo County, South Dakota IRS Wage Levy & Hardship Assistance

For taxpayers in Buffalo County, South Dakota, navigating IRS collection actions like wage levies (Form 668-W) or bank levies (Form 668-A) requires a precise understanding of the IRS Collection Financial Standards. When the IRS assesses a taxpayer's ability to pay, they require a detailed financial statement, typically Form 433-A, Collection Information Statement for Wage Earners and Self-Employed Individuals. This form itemizes income, assets, and allowable monthly expenses. The IRS calculates a taxpayer's disposable income by subtracting these allowable expenses, which are categorized into National Standards (Food, Clothing, Other, Healthcare) and Local Standards (Housing, Utilities, Transportation). For a single person in Buffalo County, the National Standard for Food, Clothing, and Other is $812 per month. While specific local housing and utilities standards are not provided for this area by the IRS, actual necessary expenses can often be argued. The goal is to demonstrate that enforced collection would cause economic hardship, a criteria recognized under IRC §6343(a)(1)(D). These standards are derived from authoritative sources like IRS.gov Collection Financial Standards, the Bureau of Labor Statistics (BLS), and the US Census Bureau.

Currently, the IRS Collection Financial Standards do not provide a specific local allowance for Housing & Utilities for Buffalo County, South Dakota. This means taxpayers cannot simply use a pre-determined IRS figure for their housing costs. In such situations, the IRS will generally allow actual, reasonable housing and utility expenses, provided they are substantiated. For context, the HUD FY2025 Fair Market Rent for a 2-bedroom residence in this area is $980.0 per month. If a taxpayer's actual rent and utilities exceed what the IRS might deem reasonable without a specific standard, they must document these costs diligently. Internal Revenue Manual (IRM) 5.15.1.10 outlines the process for requesting a deviation from standard allowances when a taxpayer's necessary expenses exceed the established amounts. Given the absence of a specific IRS housing standard for Buffalo County, demonstrating actual, necessary housing expenses, especially if they align with or exceed the HUD FMR, significantly strengthens an argument for a deviation. Regional shelter CPI data, which could indicate rising housing costs, is unfortunately not available for this specific region from the Bureau of Labor Statistics.

Beyond housing, the IRS provides specific National and Local Standards for other essential living expenses. For food, clothing, and other necessities, the IRS National Standards dictate monthly allowances ranging from $812 for a 1-person household to $1983 for a 4-person household in Buffalo County, South Dakota. These figures are based on the Bureau of Labor Statistics Consumer Expenditure Survey. Healthcare is covered by National Standards for out-of-pocket medical expenses, with an allowance of $75 per person per month for those under 65, and $153 per person per month for those 65 and over. A family of four, all under 65, would therefore be allowed $300 per month for healthcare. These amounts are derived from the Medical Expenditure Panel Survey. For transportation, Buffalo County residents are subject to the IRS Local Standards. For a single car, the ownership cost is $588 per month, with an additional operating cost of $270 per month for the region, totaling $858 per month for one vehicle. For two vehicles, the total allowance is $1446 per month. These transportation figures are based on Bureau of Labor Statistics data and American Automobile Association operating costs.

For taxpayers in Buffalo County, South Dakota facing financial distress, Currently Not Collectible (CNC) status offers a temporary reprieve from IRS enforcement actions. To qualify, you must demonstrate to the IRS that your income is insufficient to pay your basic living expenses and your tax debt. This process begins by submitting Form 433-A, Collection Information Statement, detailing all your income, assets, and necessary expenses. The IRS then compares your total monthly income against your total allowable expenses, using the National and Local Standards discussed previously. For a single filer in Buffalo County, an example of allowable monthly expenses could include a reasonable housing cost (e.g., $750.0 for a 1-bedroom apartment based on HUD FMR), $812 for food, clothing, and other necessities, $75 for healthcare, and $858 for transportation (one car). If your total allowable expenses exceed your income, you may qualify for CNC status under IRM 5.16.1. When granted, CNC status can lead to the release of an existing levy under IRC §6343. It's crucial to understand that CNC status does not forgive your tax debt; interest and penalties continue to accrue. However, it effectively pauses collections, allowing the Collection Statute Expiration Date (CSED) under IRC §6502 (the 10-year collection window) to continue running without active enforcement.