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Butte County, South Dakota IRS Wage Levy & Hardship Relief

Last updated: May 29, 2026 · Sources: IRS.gov, HUD.gov, BLS.gov

Understanding IRS Collection Standards in Butte County

Navigating an IRS wage levy (Form 668-W) or bank levy (Form 668-A) in Butte County, South Dakota, requires a precise understanding of IRS Collection Financial Standards. When the IRS evaluates a taxpayer's ability to pay, they use Form 433-A, Collection Information Statement, to calculate disposable income. This calculation incorporates both National Standards for essential expenses like food and clothing, and Local Standards for transportation. For a single individual, the National Standard for Food, Clothing & Other is $812 per month, while a family of four is allowed $1983 per month, based on Bureau of Labor Statistics Consumer Expenditure Survey data. Although specific IRS Local Standards for Housing & Utilities are not available for Butte County, SD, the IRS will evaluate actual necessary housing expenses. If a taxpayer's allowable expenses exceed their income, they may demonstrate economic hardship, as outlined in IRC §6343(a)(1)(D), potentially leading to levy release or Currently Not Collectible (CNC) status. These standards are rigorously derived from IRS.gov, BLS, and US Census Bureau sources.

Butte County Housing & Utilities Allowance vs. HUD Fair Market Rent

For taxpayers in Butte County, South Dakota, the IRS Collection Financial Standards do not provide a specific Local Standard for Housing & Utilities, showing as $N/A. In such cases, the IRS evaluates a taxpayer's actual, reasonable housing expenses. This makes referencing external data crucial. According to HUD FY2025 Fair Market Rent (FMR) data for Butte County, a 2-bedroom rental averages $1080.0 per month, while a 1-bedroom averages $820.0, and a studio is $740.0. If your actual, necessary housing expenses exceed these figures, you can request a deviation from the standard (or lack thereof) under Internal Revenue Manual (IRM) 5.15.1.10, which allows for exceptions when substantiated, reasonable expenses are higher. Demonstrating that your actual rent aligns with or even exceeds the HUD FMR for Butte County significantly strengthens an argument for a higher allowable expense in your financial analysis. Regional Shelter CPI data from the Bureau of Labor Statistics, which helps gauge housing cost changes, is not available for this specific region, further emphasizing the reliance on FMR and actual expenses.

Food, Healthcare & Transportation Allowances

Beyond housing, the IRS allows for other essential living expenses based on National and Local Standards. For food, clothing, and other miscellaneous items, National Standards provide $812 per month for a single person, breaking down into $449 for food, $44 for housekeeping supplies, $99 for apparel, $45 for personal care products, and $175 for miscellaneous items. A family of four is allowed $1983 per month. These figures are derived from the Bureau of Labor Statistics Consumer Expenditure Survey. Healthcare expenses, based on Medical Expenditure Panel Survey data, are allowed at $75 per person monthly for those under 65 and $153 per person monthly for those 65 and over. For a family of four, all under 65, this totals $300 per month ($75 x 4). Transportation allowances for Butte County, SD, are set at $588 for one car ownership costs and $270 for operating costs within this region, totaling $858 per month for one vehicle. These transportation figures are based on Bureau of Labor Statistics data and American Automobile Association operating costs, ensuring a comprehensive allowance for necessary travel.

Qualifying for Currently Not Collectible (CNC) Status in South Dakota

Achieving Currently Not Collectible (CNC) status is a critical relief option for taxpayers in Butte County, South Dakota, who face severe financial hardship and cannot pay their tax debt. To qualify, you must submit a detailed financial statement, typically Form 433-A, Collection Information Statement, to the IRS. The IRS will then compare your total monthly income against your total allowable monthly expenses, using the National and Local Standards. For example, a single filer in Butte County, SD, might have allowable expenses calculated as follows: $820.0 for 1-bedroom housing (based on HUD FMR), $812 for National Standard food/clothing/other, $75 for out-of-pocket healthcare (under 65), and $858 for transportation (one car ownership + operating). This totals $2565.0 in allowable monthly expenses. If your net monthly income is less than or equal to this amount, you may qualify for CNC status. IRM 5.16.1 outlines the procedures for CNC determinations, and once granted, the IRS will typically release any active levies, as per IRC §6343. Importantly, while in CNC status, the IRS generally ceases active collection efforts, but the Collection Statute Expiration Date (CSED) under IRC §6502 (the 10-year collection window) is not extended, making CNC a powerful strategy for allowing the statute to expire.

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Frequently Asked Questions

For Butte County, South Dakota, the IRS Collection Financial Standards specify that the Local Standard for Housing & Utilities is currently N/A. This means the IRS does not have a pre-determined, fixed allowance for housing costs in this specific area. Instead, the IRS will evaluate your actual, necessary housing expenses. Taxpayers should be prepared to substantiate their rent or mortgage payments, utilities, and other related housing costs. For reference, the HUD FY2025 Fair Market Rent (FMR) for Butte County provides benchmarks such as $740.0 for a studio, $820.0 for a 1-bedroom, and $1080.0 for a 2-bedroom. If your actual, reasonable housing expenses exceed these or what the IRS initially considers, you can request a deviation under IRM 5.15.1.10, provided you can substantiate the necessity.
To qualify for Currently Not Collectible (CNC) status in South Dakota, you must demonstrate to the IRS that you lack the financial ability to pay your tax debt without experiencing economic hardship. This process begins by filing IRS Form 433-A, Collection Information Statement, which details your income, assets, and allowable monthly expenses. The IRS then compares your net monthly income against the National Standards (for food, clothing, personal care, and miscellaneous items), Local Standards (for transportation), and your actual, reasonable housing and utility costs. For instance, a single individual's National Standard for Food, Clothing & Other is $812, plus $75 for healthcare (under 65) and $858 for transportation (1 car ownership + operating). If your total allowable expenses equal or exceed your income, the IRS may grant CNC status under IRM 5.16.1.1. This status pauses active collection efforts, and any existing levies are typically released under IRC §6343.
When the IRS issues a wage levy, typically Form 668-W (Notice of Levy on Wages, Salary, and Other Income), they cannot take your entire paycheck. Federal law, specifically IRS Publication 1494 (2025), dictates a statutorily exempt amount that the IRS must leave the taxpayer. For a single individual in Butte County, South Dakota, with zero dependents, the IRS must exempt $1096.67 per month from their wages. If that same single individual has one dependent, the exempt amount increases to $1680.0 per month. For married filing jointly with one dependent, the exemption is $2286.67 per month. Only the portion of your disposable earnings exceeding this exempt amount can be levied. South Dakota's state wage garnishment laws generally follow federal CCPA limits, which cap garnishments at 25% of disposable earnings or the amount by which disposable earnings exceed 30 times the federal minimum wage, whichever is less. However, IRS levies often take precedence and are calculated based on these specific IRS exemption tables.
Since the IRS Collection Financial Standard for Housing & Utilities is N/A for Butte County, South Dakota, taxpayers are expected to report their actual, necessary housing expenses. The IRS will evaluate these expenses for reasonableness. If your rent or mortgage, along with utilities, is higher than what the IRS might initially deem acceptable or higher than local benchmarks like the HUD FY2025 Fair Market Rent (e.g., $1080.0 for a 2-bedroom or $820.0 for a 1-bedroom in Butte County), you have the right to request a deviation. Internal Revenue Manual (IRM) 5.15.1.10 provides the framework for such deviations, allowing the IRS to approve actual expenses that are higher than standard allowances, provided they are substantiated, necessary, and reasonable for your circumstances. Documenting why your housing costs are essential and unavoidable is crucial for a successful deviation request, ensuring your financial analysis accurately reflects your living situation.
The IRS generally has 10 years to collect a tax debt, a period known as the Collection Statute Expiration Date (CSED). This 10-year period typically begins from the date the tax was assessed, as defined by Internal Revenue Code (IRC) §6502. However, certain actions can 'toll' or pause this 10-year clock, effectively extending the time the IRS has to collect. These actions include filing for bankruptcy, submitting an Offer in Compromise (Form 656), requesting a Collection Due Process (CDP) appeal, or residing outside the U.S. for an extended period. A crucial point for taxpayers in Butte County, South Dakota, is that obtaining Currently Not Collectible (CNC) status (IRM 5.16.1) does NOT extend the CSED. While in CNC, the IRS ceases active collection efforts, allowing the CSED to continue running, which can be a strategic advantage for those who truly cannot pay their tax liability.

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