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

When the IRS evaluates a taxpayer's ability to pay, particularly during an enforced collection action like a wage or bank levy, they utilize a detailed financial analysis documented on IRS Form 433-A, Collection Information Statement for Wage Earners and Self-Employed Individuals. This 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 Corson County, South Dakota, the National Standard for Food, Clothing, and Other Necessities is $812 per month, while a family of four would be allowed $1,983. Although specific IRS Local Housing Standards for Corson County, SD are not available, these standards are meticulously derived from data provided by the US Census Bureau and the Bureau of Labor Statistics. Understanding these allowances is crucial, as the IRS must consider a taxpayer's ability to provide for basic living expenses, and can release a levy if it creates an economic hardship under IRC §6343(a)(1)(D).

While the IRS Collection Financial Standards do not provide a specific Local Standard for Housing and Utilities for Corson County, South Dakota, taxpayers are still allowed reasonable and necessary housing expenses. In such cases, the IRS may refer to other relevant data. For example, the HUD FY2025 Fair Market Rent (FMR) for a 2-bedroom residence in Corson County is $930.0 per month. This figure can serve as a benchmark for reasonable housing costs when negotiating with the IRS. If a taxpayer's actual, documented housing expenses exceed the available IRS Local Standard (or in this case, a reasonable proxy like the FMR), they can argue for a deviation from the standard. Internal Revenue Manual (IRM) 5.15.1.10 outlines the process for allowing such deviations when expenses are deemed necessary and reasonable. This is particularly important given that specific regional shelter CPI data is not available for Corson County, which might otherwise indicate rising housing costs that need to be accounted for in a hardship claim.

Beyond housing, the IRS also accounts for other essential living costs through its National and Local Standards. For Corson County residents, the National Standards for Food, Clothing, and Other provide a monthly allowance. For a single person, this totals $812, broken down into $449 for Food, $44 for Housekeeping Supplies, $99 for Apparel and Services, $45 for Personal Care Products and Services, and $175 for Miscellaneous expenses. A family of four would be allowed $1,983. Healthcare is also covered by National Standards, allowing $75 per person per month for individuals under 65, and $153 for those 65 and over, based on data from the Medical Expenditure Panel Survey. For transportation, Corson County falls under a region with specific Local Standards. A single-car owner is allowed $588 for ownership costs and an additional $270 for operating costs, totaling $858 per month. These figures are derived from Bureau of Labor Statistics data and American Automobile Association operating costs, providing a comprehensive allowance for essential travel.

Achieving Currently Not Collectible (CNC) status in Corson County, South Dakota, is a critical relief option for taxpayers 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 for tax payments. This process begins by filing a comprehensive IRS Form 433-A, Collection Information Statement, detailing your assets, liabilities, income, and expenses. The IRS will then compare your reported income against the allowable National and Local Standards. For example, a single filer in Corson County might calculate their total allowable expenses as: an estimated reasonable housing cost (e.g., $930.0 for a 2BR from HUD FMR), plus $812 for Food, Clothing, and Other, $75 for out-of-pocket healthcare (if under 65), and $858 for one-car transportation, totaling approximately $2615.0. If your net income falls below this total, you may qualify for CNC. IRM 5.16.1 outlines the procedures for CNC determinations, which can lead to the release of an IRS levy under IRC §6343. Importantly, while CNC status temporarily halts collection efforts, it does not extend the Collection Statute Expiration Date (CSED), which is generally 10 years from the tax assessment date under IRC §6502.