Chicago-Joliet-Naperville, Illinois IRS Wage Levy & Hardship Assistance

When facing an IRS enforced collection action, such as a wage levy (Form 668-W) or bank levy (Form 668-A), understanding your allowable living expenses is critical. The IRS uses Form 433-A, Collection Information Statement, to calculate your disposable income by comparing your gross income against a set of National and Local Expense Standards. These standards, derived from comprehensive data by the US Census Bureau and Bureau of Labor Statistics, dictate how much the IRS believes you need for basic necessities. For a single individual in Chicago-Joliet-Naperville, IL, the National Standard for Food is $449, with a total National Standard for Food, Clothing & Other of $812. While specific IRS Local Housing Standards for Chicago-Joliet-Naperville, IL are listed as N/A for specific dollar amounts, these standards are fundamental in determining if you meet the criteria for economic hardship under IRC §6343(a)(1)(D), which can lead to a levy release or Currently Not Collectible (CNC) status. This data is directly sourced from IRS.gov Collection Financial Standards.

For taxpayers in the Chicago-Joliet-Naperville, IL HUD Metro FMR Area, navigating the IRS housing allowance can be challenging. While the IRS Collection Financial Standards do not provide specific dollar amounts for housing and utilities for this region, they do recognize that housing is a primary expense. The US Department of Housing & Urban Development (HUD) provides Fair Market Rent (FMR) data, which indicates a 2-bedroom unit in this area has an FMR of $1500.0 per month, a 1-bedroom at $1330.0, and a studio at $1250.0. If your actual, reasonable housing expenses exceed the IRS's unstated local standard, Internal Revenue Manual (IRM) 5.15.1.10 allows for a deviation. This means you can argue to the IRS that your actual, necessary expenses, such as the HUD FMR-based rent, should be allowed, strengthening your case for a lower payment or hardship status. Unfortunately, regional Shelter CPI (YoY) data from the Bureau of Labor Statistics is not available for this specific region to provide a direct year-over-year comparison.

Beyond housing, the IRS allows for other essential living expenses based on National and Local Standards. For food, clothing, and miscellaneous expenses, a single person in Illinois is allotted $812 per month, while a family of four receives $1983, with an additional $357 for each subsequent person, as per IRS National Standards derived from the Bureau of Labor Statistics Consumer Expenditure Survey. These amounts include specific categories like Food ($449), Housekeeping ($44), Apparel ($99), Personal Care ($45), and Miscellaneous ($175) for a single individual. Healthcare is another critical allowance; the IRS permits $75 per person under 65 and $153 per person 65 and over per month, based on Medical Expenditure Panel Survey data. For a family of four, all under 65, this amounts to $300 monthly. Transportation allowances for the Chicago-Joliet-Naperville, IL region include $588 for the ownership cost of one vehicle and $270 for operating costs, totaling $858 per month for one car. For two cars, the allowance is $1176 for ownership plus $270 for operating costs, totaling $1446, based on BLS data and American Automobile Association operating costs.

Achieving Currently Not Collectible (CNC) status is a critical relief option for taxpayers in Illinois facing genuine financial hardship. To qualify, you must demonstrate to the IRS that your income is insufficient to cover your necessary living expenses, leaving no disposable income to pay your tax debt. This process begins by submitting a comprehensive Form 433-A, Collection Information Statement, detailing your income, assets, and expenses. The IRS will compare your reported expenses against the National and Local Standards. For example, a single filer in Chicago-Joliet-Naperville, IL might argue for expenses including a 1-bedroom HUD FMR of $1330.0 (as a reasonable actual housing cost in absence of a specific IRS standard), National Standards for Food, Clothing & Other of $812, Out-of-Pocket Healthcare of $75, and Transportation costs of $858 (1 car ownership + operating), totaling $3075.0. If your income falls below this, you may qualify. IRM 5.16.1 outlines the procedures for CNC designation, which temporarily halts enforced collection actions. While in CNC status, the IRS will not pursue levies or garnishments, and any existing levies (Form 668-W, Form 668-A) should be released under IRC §6343. It is important to note that CNC status does not extend the 10-year Collection Statute Expiration Date (CSED) under IRC §6502, meaning the IRS still has a limited time to collect the debt.