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Navigating IRS Wage Levy & Hardship in Codington County, South Dakota

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

Understanding IRS Collection Standards in Codington County

When the IRS assesses your ability to pay a tax debt in Codington County, South Dakota, they utilize a detailed financial analysis based on Form 433-A, Collection Information Statement. This crucial form helps the IRS determine your disposable income by comparing your gross income against allowable living expenses, which are categorized into National and Local Standards. For a single individual in Codington County, the monthly National Standard for Food, Clothing, and Other necessities is $812. While specific IRS local housing allowances for Codington County are not published, the IRS relies on these established benchmarks, derived from data by the Bureau of Labor Statistics and the U.S. Census Bureau. If your allowable expenses exceed your income, the IRS may determine that collection would create an economic hardship, potentially leading to a levy release under IRC §6343(a)(1)(D). This meticulous data-driven approach ensures an accurate assessment of your financial capacity.

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

For taxpayers in Codington County, South Dakota, the IRS Collection Financial Standards do not provide a specific local housing and utilities allowance. In such cases, the IRS may consider actual necessary expenses, but taxpayers must be prepared to substantiate them. For context, the HUD FY2025 Fair Market Rent (FMR) for a 2-bedroom residence in Codington County is $930.0 per month. If your actual housing expenses exceed the general allowances or FMR amounts, you may argue for a deviation from standard allowances. Internal Revenue Manual (IRM) 5.15.1.10 outlines the process for requesting such a deviation, emphasizing that expenses must be reasonable and necessary. Presenting evidence that your rent, such as the $930.0 for a 2-bedroom home, is a necessary and unavoidable expense significantly strengthens your case. Unfortunately, regional shelter CPI data is not available for Codington County to provide year-over-year comparison.

Food, Healthcare & Transportation Allowances

Beyond housing, the IRS provides specific National and Local Standards for other essential living expenses in Codington County, South Dakota. The National Standards for Food, Clothing, and Other categories, based on the Bureau of Labor Statistics Consumer Expenditure Survey, provide a monthly allowance ranging from $812 for a single person to $1983 for a family of four. Healthcare allowances, derived from the Medical Expenditure Panel Survey, permit $75 per month for individuals under 65 and $153 per month for those 65 and over. For transportation, Codington County residents are subject to the IRS Local Standards. For one vehicle, the monthly ownership cost is $588, and the operating cost for the region is $270, totaling $858 per month. These figures, based on BLS data and American Automobile Association operating costs, are critical in determining your allowable expenses for IRS collection purposes.

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

Achieving Currently Not Collectible (CNC) status in Codington County, South Dakota, offers a temporary reprieve from IRS enforced collection actions like wage and bank levies. 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 all your income, assets, and expenses. For a single filer in Codington County, allowable monthly expenses could include a practical housing estimate like the HUD FMR for a 1-bedroom at $850.0, plus $812 for food/clothing/other, $75 for healthcare (under 65), and $858 for transportation. This totals $2595.0. If your income falls below this threshold, the IRS may grant CNC status. IRM 5.16.1 outlines the procedures for CNC, and under IRC §6343, the IRS must release a levy if it creates economic hardship. While in CNC, the 10-year Collection Statute Expiration Date (CSED) under IRC §6502 continues to run, meaning CNC status does not extend the time the IRS has to collect your debt.

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Frequently Asked Questions

For Codington County, South Dakota, the IRS Collection Financial Standards do not publish a specific local housing and utilities allowance. This means the IRS will evaluate your actual, reasonable, and necessary housing expenses. For reference, the HUD FY2025 Fair Market Rent for a 2-bedroom unit in Codington County is $930.0 per month, and a 1-bedroom is $850.0. While these are not IRS allowances, they provide a benchmark for typical housing costs. Taxpayers should be prepared to substantiate their actual rent or mortgage payments, property taxes, and utility costs, justifying them as necessary living expenses to the IRS during their financial analysis on Form 433-A.
To qualify for Currently Not Collectible (CNC) status in South Dakota, specifically Codington County, you must prove to the IRS that you lack the financial ability to pay your tax debt without causing economic hardship. This involves completing and submitting Form 433-A, Collection Information Statement, which details your income, assets, and allowable living expenses. The IRS compares your income against their National and Local Standards. For example, a single person in Codington County might have $812 for food/clothing/other, $75 for healthcare (under 65), and $858 for transportation, in addition to reasonable housing costs (e.g., HUD FMR of $850.0 for a 1-bedroom). If your total allowable expenses exceed your income, the IRS, guided by IRM 5.16.1, may place your account in CNC status, temporarily halting enforced collection actions.
When the IRS issues a wage levy (Form 668-W) in Codington County, South Dakota, the amount they can take from your paycheck is determined by IRS Publication 1494, Table for Figuring Amount Exempt from Levy. This table specifies a portion of your wages that is exempt from levy, ensuring you have funds for basic living expenses. For a single individual with no dependents, the exempt amount is $1096.67 per month. If that same single individual claims one dependent, the exempt amount increases to $1680.0 per month. Any earnings above this exempt threshold can be levied by the IRS. This federal standard overrides state wage garnishment limits, which typically follow the Consumer Credit Protection Act (CCPA) limits of 25% of disposable earnings or the amount above 30 times the federal minimum wage.
If your rent in Codington County, South Dakota, exceeds what the IRS might typically allow based on general standards or comparable data, you still have an avenue to justify your actual expenses. Since the IRS Collection Financial Standards do not provide a specific housing allowance for Codington County, they will consider your actual, reasonable, and necessary expenses. For instance, if your rent is $930.0 for a 2-bedroom apartment, which aligns with the HUD FY2025 Fair Market Rent, you would present this on Form 433-A. Under IRM 5.15.1.10, taxpayers can request a deviation from standard allowances if their expenses are necessary and reasonable. You must provide documentation and a compelling explanation to the IRS to demonstrate why your higher housing cost is unavoidable and essential for maintaining your household.
The IRS generally has 10 years to collect a tax debt, a period known as the Collection Statute Expiration Date (CSED). This 10-year clock, established under Internal Revenue Code (IRC) §6502, typically begins from the date the tax was assessed. It is critical for taxpayers in Codington County, South Dakota, to understand that while certain actions, such as filing for bankruptcy or an Offer in Compromise, can pause or 'toll' the CSED, being placed in Currently Not Collectible (CNC) status does not. If your account is in CNC, the 10-year collection period continues to run. This means that if the CSED expires while you are in CNC status, the IRS loses its legal authority to collect the tax debt, providing a potential pathway to resolution for taxpayers facing long-term financial hardship.

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