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Navigating IRS Wage Levy & Hardship in Custer County, Montana

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

Understanding IRS Collection Standards in Custer County

Facing IRS enforced collection in Custer County, Montana, can be daunting, but understanding the IRS Collection Financial Standards is your first step. When evaluating a taxpayer's ability to pay, the IRS uses Form 433-A, Collection Information Statement, to calculate disposable income. This calculation incorporates both National and Local Standards for various living expenses. For instance, a single individual in Montana is allowed $812 monthly for Food, Clothing, and Other necessary expenses, as per the IRS National Standards derived from Bureau of Labor Statistics data. While specific IRS Local Standards for Housing & Utilities are not provided for Custer County, MT, the IRS will generally allow actual, reasonable expenses. The goal is to determine if collecting the tax would create an 'economic hardship' under Internal Revenue Code (IRC) §6343(a)(1)(D). This crucial data, sourced from IRS.gov, Bureau of Labor Statistics (BLS), and US Census Bureau, dictates what the IRS considers essential for basic living.

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

For Custer County, Montana, the IRS Collection Financial Standards indicate 'N/A' for Housing & Utilities, meaning the IRS considers actual, reasonable expenses. This is a critical point for taxpayers, as it allows for flexibility beyond a fixed standard. However, what constitutes 'reasonable' can be subjective. The US Department of Housing & Urban Development (HUD) provides FY2025 Fair Market Rent (FMR) data, which can serve as a benchmark. For example, the HUD FMR for a 2-bedroom unit in Custer County is $1610.0 per month, significantly higher than some fixed IRS housing standards in other regions. If your actual housing costs exceed what the IRS might initially deem reasonable, Internal Revenue Manual (IRM) 5.15.1.10 allows for a deviation from the standard, provided sufficient documentation and justification. This is particularly relevant when local rental costs, like the $1610.0 for a 2BR, exceed a hypothetical lower standard, strengthening an argument for a deviation. While regional shelter CPI data is not available for this specific area, the HUD FMR provides a strong local economic indicator.

Food, Healthcare & Transportation Allowances

Beyond housing, the IRS Collection Financial Standards provide specific allowances for other essential living expenses in Custer County, Montana. For Food, Clothing, and Other items, the National Standards, 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, with an additional $357 for each subsequent family member. Healthcare is also covered, with a monthly out-of-pocket allowance of $75 per person under 65 and $153 per person aged 65 and over, derived from the Medical Expenditure Panel Survey. For transportation, Custer County residents are allotted specific monthly amounts. The IRS Local Standards for Transportation, based on BLS data and American Automobile Association (AAA) operating costs, allow $588 for the ownership of one car and $270 for its operating costs in the region, totaling $858 per month for one vehicle. For two cars, the ownership allowance rises to $1176, making the total $1446 per month.

Qualifying for Currently Not Collectible (CNC) Status in Montana

For Custer County, Montana taxpayers facing severe financial distress, Currently Not Collectible (CNC) status offers a temporary reprieve from IRS enforcement actions. To qualify, you must demonstrate to the IRS that you lack the ability to pay your tax debt after accounting for necessary living expenses. This process begins by submitting a comprehensive Form 433-A, Collection Information Statement, detailing your income, assets, and monthly expenses. The IRS will compare your total income against your total allowable expenses, which include the National Standards (e.g., $812 for a single person's food allowance) and Local Standards (e.g., $858 for one car transportation). For a single filer in Custer County, a potential total allowable expense could be calculated as: a justified actual housing cost (e.g., $1110.0 for a studio, based on HUD FMR, if approved as reasonable), plus $812 for food, $75 for healthcare (under 65), and $858 for transportation, totaling $2955.0. If your income falls below your allowable expenses, the IRS may place your account in CNC status under IRM 5.16.1, leading to the release of levies as per IRC §6343. It is crucial to remember that CNC status does not forgive the debt; interest and penalties continue to accrue, and the 10-year Collection Statute Expiration Date (CSED) under IRC §6502 continues to run without extension.

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Frequently Asked Questions

For Custer County, Montana, the IRS Collection Financial Standards for Housing & Utilities are listed as 'N/A,' meaning the IRS does not provide a fixed standard. Instead, taxpayers are generally allowed their actual, reasonable, and necessary housing expenses. It's important to justify these costs. For context, the HUD FY2025 Fair Market Rent (FMR) for Custer County provides benchmarks, such as $1110.0 for a studio apartment, $1230.0 for a 1-bedroom, and $1610.0 for a 2-bedroom unit. If your actual rent aligns with or exceeds these figures, you may need to provide documentation. Per IRM 5.15.1.10, if your actual expenses exceed the unlisted 'N/A' standard, you can request a deviation, providing proof that your expenses are necessary and reasonable given local market conditions.
To qualify for Currently Not Collectible (CNC) status in Montana, you must demonstrate to the IRS that you lack the ability to pay your tax debt due to financial hardship. This typically involves submitting Form 433-A, Collection Information Statement, detailing your income, assets, and all allowable monthly expenses. The IRS uses National Standards (e.g., $812 for a single person's food and clothing) and Local Standards (e.g., $858 for one-car transportation in Custer County) to calculate your disposable income. If your total income after these allowable expenses is zero or negative, the IRS may place your account in CNC status under IRM 5.16.1. This status temporarily halts enforced collection actions like wage or bank levies, but interest and penalties continue to accrue, and the debt remains until the Collection Statute Expiration Date (CSED) is reached.
The IRS can levy a portion of your wages in Custer County, Montana, using Form 668-W, Notice of Levy on Wages, Salary, and Other Income. However, a significant portion of your earnings is exempt from levy to ensure you can meet basic living expenses, as mandated by IRC §6331. The exact exempt amount depends on your filing status and the number of dependents you claim, as specified in IRS Publication 1494 (2025). For example, a single individual with zero dependents has $1096.67 per month protected from levy, while a single individual claiming one dependent is exempt from $1680.0 per month. For a married individual filing jointly with one dependent, $2286.67 per month is exempt. The IRS will only levy the amount exceeding these specific statutory exemptions.
Since the IRS Collection Financial Standards for Housing & Utilities in Custer County, Montana, are 'N/A,' the IRS allows for actual, reasonable expenses. If your rent exceeds what the IRS might initially consider reasonable, you can, and should, request a deviation from the standard. For instance, if your 2-bedroom rent is $1610.0, aligning with the HUD FY2025 Fair Market Rent, you would present this as your actual, necessary expense. IRM 5.15.1.10 outlines the process for requesting such a deviation, requiring you to provide documentation like your lease agreement, utility bills, and a written explanation demonstrating why your expenses are necessary and cannot be reduced. High local housing costs, as indicated by HUD FMR data, can strongly support your argument for allowing your actual rent.
The IRS generally has 10 years to collect a tax debt from the date it was assessed. This period is known as the Collection Statute Expiration Date (CSED), as defined by Internal Revenue Code (IRC) §6502. It's a critical deadline for both the IRS and taxpayers in Custer County, Montana. During this 10-year window, the IRS can pursue various collection actions, including levies (IRC §6331) and liens. If your account is placed in Currently Not Collectible (CNC) status under IRM 5.16.1 due to hardship, it's important to understand that this status does not extend the CSED. The 10-year clock continues to run. Therefore, strategically utilizing CNC status can sometimes lead to the CSED expiring while the debt remains uncollected, effectively resolving the tax liability without payment.

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