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IRS Wage Levy & Hardship Relief for Chaffee County, Colorado Taxpayers

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

Understanding IRS Collection Standards in Chaffee County

When facing IRS enforced collection actions in Chaffee County, Colorado, understanding the IRS Collection Financial Standards is paramount. The IRS uses these standards to determine a taxpayer's ability to pay, often assessed through Form 433-A, Collection Information Statement for Wage Earners and Self-Employed Individuals. These standards dictate how much of your income is considered 'disposable' and thus available to pay your tax debt. For instance, the National Standards for Food allow a single person in Chaffee County $812 per month, while a family of four is allotted $1983. It's crucial to note that Chaffee County currently has no specific IRS Local Housing & Utilities Standard listed on IRS.gov, meaning actual expenses must be justified. The IRS derives these figures from authoritative sources such as the Bureau of Labor Statistics (BLS) and the U.S. Census Bureau. If your allowable expenses exceed your income, the IRS may determine that an 'economic hardship' exists, as defined under Internal Revenue Code (IRC) §6343(a)(1)(D), potentially leading to a levy release or Currently Not Collectible (CNC) status.

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

For taxpayers in Chaffee County, Colorado, the absence of a specific IRS Local Housing & Utilities Standard (listed as $N/A across all household sizes on IRS.gov Collection Financial Standards) means the IRS will evaluate your actual housing and utility expenses. However, these expenses must be deemed 'reasonable and necessary.' For context, the U.S. Department of Housing and Urban Development (HUD) reports the FY2025 Fair Market Rent (FMR) for a 2-bedroom unit in Chaffee County as $1930.0 per month. If your actual rent significantly exceeds the FMR, or if your housing expenses are challenged, you may need to argue for a deviation from standard allowances, as outlined in Internal Revenue Manual (IRM) 5.15.1.10. Demonstrating that your actual, necessary housing costs are higher than comparable local rents can strengthen your case. While regional shelter Consumer Price Index (CPI) data is not available for Chaffee County, the consistent rise in FMR figures often reflects increasing housing costs, which can support a deviation argument.

Food, Healthcare & Transportation Allowances

Beyond housing, the IRS Collection Financial Standards provide specific allowances for other essential living expenses in Chaffee County, Colorado. For Food, Clothing & Other expenses, a single individual is allowed $812 per month, while a family of four can claim $1983. These National Standards are based on data from the Bureau of Labor Statistics Consumer Expenditure Survey. Healthcare is covered by National Standards for Out-of-Pocket Healthcare, allowing $75 per person per month for those under 65 and $153 for those 65 and over, derived from the Medical Expenditure Panel Survey. For Transportation, Chaffee County residents can claim a Local Standard of $588 per month for one car ownership and an additional $270 for operating costs in the region, totaling $858 per month for one vehicle. These transportation figures are based on BLS data and American Automobile Association (AAA) operating cost analyses, ensuring a comprehensive view of necessary expenses.

Qualifying for Currently Not Collectible (CNC) Status in Colorado

Achieving Currently Not Collectible (CNC) status in Chaffee County, Colorado, means the IRS agrees you cannot afford to pay your tax debt right now due to financial hardship. To qualify, you must submit a detailed financial statement, typically Form 433-A, to the IRS. The IRS will then compare your total monthly income against your total allowable monthly expenses, using the National and Local Collection Financial Standards. For example, a single filer in Chaffee County might claim $1620.0 for 1-bedroom housing (using HUD FMR as a reasonable benchmark), $812 for food, $75 for healthcare (under 65), and $858 for transportation, totaling $3365.0 in allowable expenses. If your net income falls below this threshold, the IRS may place your account in CNC status. This process is detailed in IRM 5.16.1. While in CNC, the IRS generally ceases collection efforts, including releasing an existing wage levy (Form 668-W) or bank levy (Form 668-A) under IRC §6343. It's important to remember that CNC status does not forgive the debt; the 10-year Collection Statute Expiration Date (CSED) under IRC §6502 continues to run, but the IRS will periodically review your financial situation.

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Frequently Asked Questions

For Chaffee County, Colorado, the IRS Collection Financial Standards for Housing & Utilities currently list 'N/A' for all household sizes. This means there isn't a pre-determined, fixed allowance. Instead, the IRS will evaluate your actual, reasonable, and necessary housing and utility expenses as reported on Form 433-A. While there's no specific IRS standard, the U.S. Department of Housing and Urban Development (HUD) provides Fair Market Rent (FMR) data, which can serve as a benchmark for what the IRS considers reasonable. For instance, the FY2025 FMR for a 1-bedroom unit in Chaffee County is $1620.0, and for a 2-bedroom unit, it's $1930.0. If your housing costs exceed these amounts, you might need to provide additional justification or argue for a deviation based on specific circumstances, referencing IRM 5.15.1.10.
To qualify for Currently Not Collectible (CNC) status in Colorado, you must demonstrate to the IRS that you lack the ability to pay your tax debt due to financial hardship. This typically involves submitting a comprehensive financial statement, such as Form 433-A, Collection Information Statement for Wage Earners and Self-Employed Individuals. The IRS will analyze your income, assets, and allowable expenses based on their National and Local Collection Financial Standards. For example, a single person in Chaffee County might have allowable expenses including $812 for food, $75 for healthcare (under 65), and $858 for transportation, plus reasonable actual housing costs (e.g., $1620.0 for a 1-bedroom unit based on HUD FMR). If your total allowable expenses exceed your net disposable income, the IRS may grant CNC status, temporarily halting collection efforts. This process is guided by IRM 5.16.1 and is a critical step for taxpayers facing severe financial strain, as it can lead to the release of levies under IRC §6343.
If the IRS issues a wage levy (Form 668-W) to your employer in Chaffee County, Colorado, the amount they can take from your paycheck is determined by IRS Publication 1494, 'Table for Figuring Amount Exempt from Levy.' This publication outlines a specific amount of your wages that is exempt from levy, based on your filing status and the number of dependents you claim. For example, for 2025, a single individual claiming zero dependents has $1096.67 per month exempted from levy. A married individual filing jointly with one dependent has $2286.67 per month exempted. Any earnings above this exempt amount are subject to the levy. Unlike state wage garnishments which often limit the amount to 25% of disposable earnings, federal IRS levies do not have this percentage cap; they only exempt a fixed amount, making them significantly more impactful. Understanding these specific exemption amounts is crucial for taxpayers facing an IRS wage levy.
In Chaffee County, Colorado, there is no specific IRS Local Housing & Utilities Standard listed (it's 'N/A'). This means the IRS will consider your actual housing expenses. If your actual rent is higher than what the IRS deems 'reasonable' based on local market conditions, such as the HUD Fair Market Rent (FMR) for your area (e.g., $1620.0 for a 1-bedroom or $1930.0 for a 2-bedroom in FY2025), you may need to provide additional documentation and justification. Internal Revenue Manual (IRM) 5.15.1.10 allows for deviations from standard allowances in cases where a taxpayer can demonstrate that their necessary expenses exceed the standard due to unique circumstances. This could include higher costs for necessary repairs, medical needs requiring a specific type of housing, or other unavoidable factors. Presenting a strong case with supporting evidence is essential to have these higher expenses recognized and included in your allowable living costs.
The IRS generally has 10 years to collect a tax debt, starting from the date the tax was assessed. This period is known as the Collection Statute Expiration Date (CSED), established under Internal Revenue Code (IRC) §6502. After this 10-year period, the IRS can no longer legally pursue collection actions for that specific tax liability. However, certain events can 'toll' or extend the CSED, such as filing for bankruptcy, submitting an Offer in Compromise (Form 656), or requesting a Collection Due Process (CDP) hearing. Placing an account in Currently Not Collectible (CNC) status, as detailed in IRM 5.16.1, does not extend the CSED; the 10-year clock continues to run while the account is in CNC status. For taxpayers in Chaffee County, Colorado, understanding their CSED is a critical component of their tax resolution strategy, as a debt that is nearing its CSED may offer different resolution opportunities.

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