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IRS Wage Levy & Hardship Solutions for Taxpayers in Costilla County, Colorado

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

Understanding IRS Collection Standards in Costilla County

When facing IRS enforced collection actions in Costilla County, Colorado, it is crucial to understand how the IRS assesses your ability to pay. The IRS uses Form 433-A, Collection Information Statement for Wage Earners and Self-Employed Individuals, to determine your disposable income by comparing your gross income against allowable living expenses. These expenses are derived from IRS National and Local Standards, which aim to provide a baseline for necessary living costs. For a single individual in Costilla County, the IRS National Standard for food is $449, with a total 'Food, Clothing & Other' allowance of $812. While specific local housing standards for Costilla County are listed as 'N/A' by IRS.gov, taxpayers must still demonstrate reasonable housing expenses. If your allowable expenses exceed your income, the IRS may determine that an economic hardship exists, as outlined in IRC §6343(a)(1)(D), potentially leading to levy release or Currently Not Collectible status. This critical data is sourced from IRS.gov Collection Financial Standards, which incorporate information from the Bureau of Labor Statistics (BLS) and the US Census Bureau.

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

For taxpayers in Costilla County, Colorado, the IRS Collection Financial Standards currently list 'N/A' for specific local housing and utilities allowances. This absence of a defined standard means the IRS will evaluate your actual, reasonable housing expenses. However, the Department of Housing and Urban Development (HUD) provides Fair Market Rent (FMR) data, which can serve as a strong benchmark for what constitutes a reasonable expense in the area. For example, the HUD FY2025 FMR for a 2-bedroom unit in Costilla County is $1100.0 per month. If your actual housing expenses exceed what the IRS might deem reasonable, even without a specific local standard, you can request a deviation from the standard using procedures outlined in Internal Revenue Manual (IRM) 5.15.1.10. This is particularly relevant if your actual, necessary rent aligns more closely with HUD FMR figures, such as $1100.0 for a 2-bedroom residence. Unfortunately, regional shelter Consumer Price Index (CPI) data from the Bureau of Labor Statistics is not available for this specific region to provide a year-over-year comparison.

Food, Healthcare & Transportation Allowances

Beyond housing, the IRS allows for other essential living expenses when determining your ability to pay. For Costilla County residents, the IRS National Standards for 'Food, Clothing & Other' provide a monthly allowance ranging from $812 for a single person to $1983 for a family of four, with an additional $357 for each subsequent person. These figures are based on the Bureau of Labor Statistics Consumer Expenditure Survey. Healthcare expenses are also factored in, with the IRS allowing $75 per person per month for those under 65 and $153 per person per month for those 65 and over. This is derived from the Medical Expenditure Panel Survey. For transportation in Costilla County, the IRS Local Standards allow for a combined monthly total of $858 for one owned vehicle, which includes $588 for ownership costs and $270 for operating costs in the region. These transportation standards are based on BLS data and American Automobile Association (AAA) operating cost analyses, ensuring taxpayers can maintain essential work and personal travel.

Qualifying for Currently Not Collectible (CNC) Status in Colorado

Achieving Currently Not Collectible (CNC) status in Costilla County, Colorado, means the IRS has determined you lack the financial ability to pay your tax debt, making it a critical relief option. To qualify, you must submit a detailed financial disclosure, typically on Form 433-A, Collection Information Statement. The IRS will compare your total monthly income against your total allowable expenses, which include the National and Local Standards. For example, a single filer in Costilla County demonstrating reasonable actual housing expenses of $1100.0 (consistent with HUD's 2BR FMR), along with the National Standard for food ($812), healthcare ($75 for under 65), and local transportation ($858 for one car), would have total allowable monthly expenses of $2845. If their income does not exceed this amount, they may qualify for CNC. IRM 5.16.1 details the procedures for CNC determinations, which can lead to the release of an IRS levy under IRC §6343. Importantly, while CNC status pauses active collection, it does not stop the accrual of penalties and interest, nor does it extend the Collection Statute Expiration Date (CSED), which is generally 10 years from the assessment date under IRC §6502.

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Frequently Asked Questions

For Costilla County, Colorado, the IRS Collection Financial Standards for Housing and Utilities are currently listed as 'N/A' for 2025. This means the IRS will evaluate your actual, reasonable housing expenses when determining your ability to pay. While there isn't a fixed IRS standard, the Department of Housing and Urban Development (HUD) provides Fair Market Rent (FMR) data, which can guide what the IRS considers reasonable. For instance, the HUD FY2025 FMR for a 2-bedroom unit in Costilla County is $1100.0 per month. Taxpayers should be prepared to document their actual housing costs and, if necessary, argue for a deviation based on these realistic local market rates, as allowed under IRM 5.15.1.10.
To qualify for Currently Not Collectible (CNC) status in Colorado, including Costilla County, you must demonstrate to the IRS that you lack the financial ability to pay your tax debt. This typically involves submitting Form 433-A, Collection Information Statement, detailing your income, assets, and allowable living expenses. The IRS compares your income to the IRS National and Local Standards. For example, a single individual's total allowable expenses would include $812 for food, clothing, and other items, $75 for healthcare (under 65), and $858 for one car's transportation costs. If your total allowable expenses, including a reasonable housing expense (e.g., matching HUD's 2BR FMR of $1100.0 for Costilla County), exceed your income, you may qualify. IRM 5.16.1 outlines the procedures for placing an account in CNC status, which can lead to the release of an IRS levy under IRC §6343.
The amount the IRS can levy from your paycheck in Costilla County, Colorado, is determined by federal law and specified in IRS Publication 1494. Unlike state wage garnishments, which follow federal CCPA limits (25% of disposable earnings or amount above 30x federal minimum wage), IRS wage levies (Form 668-W) have specific exemption amounts. For 2025, a single taxpayer with zero dependents is exempt $1096.67 per month from their wages. A single taxpayer with one dependent is exempt $1680.0 per month. For a married filing jointly taxpayer with one dependent, the exemption is $2286.67 per month. The IRS will levy any wages exceeding these exempt amounts. It's critical to understand these specific figures to assess the impact of a wage levy and explore options for release or adjustment.
If your necessary rent in Costilla County, Colorado, exceeds the IRS housing standard, especially since the IRS currently lists 'N/A' for this specific area, you can still argue for your actual, reasonable expenses. The IRS allows for deviations from its standards when justified by unique circumstances, as detailed in IRM 5.15.1.10. For example, if your actual rent is $1100.0 for a 2-bedroom unit, which aligns with the HUD FY2025 Fair Market Rent for Costilla County, you have a strong basis to claim this as a necessary expense. You will need to provide documentation such as a lease agreement and rent receipts. Highlighting that your rent is consistent with local market data, like HUD's FMR, strengthens your argument for the IRS to accept your actual housing costs rather than an arbitrary lower figure.
The IRS generally has 10 years to collect a tax debt from the date of assessment, a period known as the Collection Statute Expiration Date (CSED), as mandated by IRC §6502. This 10-year clock can be paused or extended under specific circumstances, such as during an Offer in Compromise (Form 656) review, a Collection Due Process (CDP) appeal, or periods when you reside outside the U.S. While being placed in Currently Not Collectible (CNC) status means the IRS pauses active collection efforts due to economic hardship, it does not typically extend the CSED. This means if you are in CNC status, the 10-year collection window continues to run, and the debt may eventually expire without being fully paid. Understanding your CSED is a critical component of any long-term tax resolution strategy.

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