Navigating IRS Wage Levy & Hardship in Burlington, North Carolina

When the IRS assesses your ability to pay back taxes in Burlington, NC MSA, they meticulously analyze your financial situation using Form 433-A, Collection Information Statement. This form requires a detailed breakdown of your income, assets, and allowable expenses. The IRS determines your 'disposable income' by subtracting these allowable expenses from your gross income. These expenses are governed by the IRS National and Local Standards, which are derived from comprehensive data sources including IRS.gov, the Bureau of Labor Statistics (BLS), and the U.S. Census Bureau. For instance, a single individual in Burlington, NC MSA is typically allowed $812 monthly for food, clothing, and other necessities. While specific local housing allowances are not provided for this area, the IRS evaluates all necessary living costs against these rigorous standards. If your income, after allowable expenses, leaves you with insufficient funds for basic living, the IRS may determine that an economic hardship exists, allowing for levy release under IRC §6343(a)(1)(D).

For taxpayers in Burlington, NC MSA, the IRS Collection Financial Standards currently do not provide a specific local allowance for Housing & Utilities. This means the IRS will typically evaluate your actual housing costs, but these must be deemed reasonable and necessary. To provide context for housing costs in your area, the U.S. Department of Housing and Urban Development (HUD) reports the FY2025 Fair Market Rent (FMR) for a 2-bedroom unit in the Burlington, NC MSA as $1470.0. If your actual housing expense, such as rent or mortgage, significantly exceeds the general housing costs in your community, you may need to submit a deviation request to the IRS. Internal Revenue Manual (IRM) 5.15.1.10 outlines the process for allowing expenses that exceed the published standards, requiring clear justification and documentation. While regional shelter CPI data is not available for this specific region, the general trend in housing costs can often strengthen an argument for a deviation, especially if your reasonable expenses surpass any implied IRS allowance.

Beyond housing, the IRS allows for other essential living expenses based on National and Local Standards. For food, clothing, and other necessities, a single person in Burlington, NC MSA is allotted $812 per month, while a family of four can claim $1983. These figures are based on the Bureau of Labor Statistics' Consumer Expenditure Survey. Healthcare is another critical allowance; individuals under 65 are allowed $75 monthly, and those 65 and over are allowed $153 monthly per person, based on the Medical Expenditure Panel Survey. This means a family of four, all under 65, could claim $300 per month for out-of-pocket healthcare. For transportation in Burlington, NC MSA, the IRS Local Standards allow $588 for one owned car (covering payments, insurance, etc.) plus an additional $270 for operating costs (fuel, maintenance) in the southern region, totaling $858 per month for one vehicle. These allowances, derived from BLS data and American Automobile Association operating costs, are crucial for determining your true ability to pay.

Achieving Currently Not Collectible (CNC) status in North Carolina means the IRS has determined you cannot afford to pay your tax debt without experiencing economic hardship. To qualify, you must file Form 433-A, Collection Information Statement, providing a comprehensive financial snapshot. The IRS will compare your total monthly income against your total allowable expenses, which include the National and Local Standards discussed above. For example, a single filer in Burlington, NC MSA with a rent expense of $1470.0 (based on HUD FMR for a 2BR), plus $812 for food, $75 for healthcare, and $858 for transportation, would have total allowable expenses of $3215.0. If their net monthly income is less than or equal to this amount, they may qualify for CNC status. IRM 5.16.1 outlines the procedures for placing an account in CNC status, which results in the IRS ceasing active collection efforts, including releasing levies under IRC §6343. Importantly, CNC status does not extend the Collection Statute Expiration Date (CSED) under IRC §6502, meaning the IRS generally has 10 years from the assessment date to collect the tax, regardless of CNC status.