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Dallam County, Texas: Navigating IRS Wage Levy & Hardship Status

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

Understanding IRS Collection Standards in Dallam County, TX

For taxpayers in Dallam County, Texas, confronting an IRS enforced collection action such as a wage levy (Form 668-W) or bank levy (Form 668-A) necessitates a clear understanding of the IRS Collection Financial Standards. When assessing a taxpayer's ability to pay, the IRS uses Form 433-A, Collection Information Statement for Wage Earners and Self-Employed Individuals, to calculate disposable income. This calculation relies on established National and Local Standards for various living expenses. For a single individual, the National Standard for Food, Clothing, and Other Necessities is $812 per month, while a family of four can claim $1983 per month. Although specific IRS Local Standards for Housing & Utilities are not provided for Dallam County, the IRS does allow for deviations based on actual, necessary expenses, especially when facing economic hardship, as outlined in IRC §6343(a)(1)(D). These vital financial benchmarks are derived from authoritative sources like IRS.gov Collection Financial Standards, Bureau of Labor Statistics (BLS) data, and the U.S. Census Bureau.

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

While the IRS Collection Financial Standards do not provide a specific Local Standard for Housing & Utilities for Dallam County, Texas, taxpayers are not left without options. The U.S. Department of Housing & Urban Development (HUD) Fair Market Rent (FMR) provides a relevant benchmark for actual housing costs in the area. For instance, the HUD FY2025 FMR for a 2-bedroom residence in Dallam County is $1050.0 per month. If a taxpayer's actual, necessary housing expenses exceed the IRS's unstated or assumed standard, or if no standard is provided, they can request a deviation. Internal Revenue Manual (IRM) 5.15.1.10 permits an IRS Revenue Officer to allow for expenses exceeding the National or Local Standards if the taxpayer can substantiate that the expenses are necessary and reasonable. Documenting that your actual rent, such as $1050.0 for a 2-bedroom home, significantly exceeds any implicit IRS allowance strengthens an argument for a deviation, demonstrating a legitimate economic hardship. Regional Shelter CPI data, which tracks changes in housing costs, is unfortunately not available for this specific region.

Food, Healthcare & Transportation Allowances

Beyond housing, the IRS Collection Financial Standards account for other essential living costs for taxpayers in Dallam County, Texas. The National Standards for Food, Clothing, and Other Necessities, derived from 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 is another critical component; the National Standards for Out-of-Pocket Healthcare, based on the Medical Expenditure Panel Survey, allocate $75 per person per month for those under 65 and $153 per person per month for those 65 and over. For transportation, the Local Standards for Dallam County allow for a total of $858 per month for one owned car, which includes $588 for ownership costs and $270 for operating costs, based on BLS data and American Automobile Association figures. These allowances are crucial in determining a taxpayer's ability to pay their tax debt without incurring further financial hardship.

Qualifying for Currently Not Collectible (CNC) Status in Texas

Achieving Currently Not Collectible (CNC) status offers a vital reprieve for Dallam County, Texas taxpayers facing severe financial hardship. To qualify, you must demonstrate to the IRS that your allowable monthly living expenses equal or exceed your monthly income, leaving no disposable income to pay your tax debt. This is primarily determined through the submission of Form 433-A. For a single filer in Dallam County, for example, if their documented housing cost is $870.0 (based on HUD FMR for a 1-bedroom), coupled with National Standards for food ($812), healthcare ($75 for under 65), and transportation ($858 for one owned car), their total allowable expenses would be $2615. If their monthly income is less than or equal to this amount, they may qualify for CNC. IRM 5.16.1 outlines the procedures for placing an account in CNC status, which can lead to a levy release under IRC §6343. Importantly, while CNC status temporarily stops collection actions, it does not stop interest and penalties from accruing, nor does it extend the Collection Statute Expiration Date (CSED) under IRC §6502, which typically limits the IRS to 10 years to collect a tax debt.

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Frequently Asked Questions

The IRS Collection Financial Standards do not specify a Local Standard for Housing & Utilities for Dallam County, Texas. However, the U.S. Department of Housing & Urban Development (HUD) provides a valuable reference with its FY2025 Fair Market Rent (FMR) data, showing a 2-bedroom residence at $1050.0 per month. If your actual, necessary housing expenses exceed what the IRS might implicitly allow, you can request a deviation. Internal Revenue Manual (IRM) 5.15.1.10 permits Revenue Officers to consider actual necessary expenses that exceed standard allowances, provided they are reasonable and fully substantiated. This is crucial for demonstrating economic hardship and can significantly impact your ability to pay.
To qualify for Currently Not Collectible (CNC) status in Texas, you must prove to the IRS that you lack the financial ability to pay your tax debt without experiencing economic hardship. This involves submitting Form 433-A, Collection Information Statement, detailing your income, assets, and all allowable living expenses. The IRS will compare your income against National and Local Standards, such as $812 per month for a single person's food, clothing, and other expenses, or $75 per month for out-of-pocket healthcare for someone under 65. If your total allowable expenses, including housing, food, transportation ($858 for one car), and healthcare, equal or exceed your monthly income, the IRS may place your account in CNC status under IRM 5.16.1. This temporarily halts collection actions, including levies, but does not forgive the debt.
When the IRS issues a wage levy (Form 668-W) in Dallam County, Texas, the amount they can seize from your paycheck is determined by IRS Publication 1494, Table for Figuring Amount Exempt from Levy. This table outlines specific exempt amounts based on your filing status and number of dependents. For example, in 2025, a single taxpayer with zero dependents has $1096.67 per month protected from a wage levy, while a single taxpayer with one dependent has $1680.0 per month protected. Any income above this exempt amount is subject to the levy. The IRS levy rules generally supersede state wage garnishment laws, which in Texas follow federal 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 Dallam County, Texas, exceeds the IRS's standard allowances (or if no specific local housing standard is provided, as is the case for Dallam County), you can still argue for the full amount of your necessary housing expense. The IRS allows for deviations from its National and Local Standards under certain circumstances. For example, if your actual, necessary rent is $1050.0 for a 2-bedroom residence, as indicated by HUD FY2025 Fair Market Rent data, and you can substantiate this expense, Internal Revenue Manual (IRM) 5.15.1.10 permits a Revenue Officer to allow a higher amount. You must provide documentation such as lease agreements and rent receipts to demonstrate that your housing costs are reasonable and necessary to avoid economic hardship, which is a key factor in collection determinations.
The IRS generally has a 10-year period to collect a tax debt, known as the Collection Statute Expiration Date (CSED), as mandated by Internal Revenue Code (IRC) §6502. This 10-year period typically begins from the date the tax was assessed. While collection actions like wage levies (Form 668-W) and bank levies (Form 668-A) can be initiated during this time, certain events can pause or extend the CSED, such as filing for bankruptcy, submitting an Offer in Compromise (Form 656), or requesting a Collection Due Process (CDP) hearing. Placing your account in Currently Not Collectible (CNC) status under IRM 5.16.1, while pausing active collection, does not extend the CSED, making it a powerful strategy for some taxpayers in Dallam County, Texas, to allow the statute to expire.

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