Navigating IRS Wage Levy and Hardship in Franklin County, Alabama

When facing IRS collection actions in Franklin County, Alabama, understanding the Internal Revenue Service (IRS) Collection Financial Standards is crucial. These standards, utilized by the IRS to determine a taxpayer's ability to pay, are detailed on Form 433-A, Collection Information Statement for Wage Earners and Self-Employed Individuals. The IRS assesses your allowable monthly expenses using National Standards (for categories like Food, Clothing, and Miscellaneous) and Local Standards (for Housing, Utilities, and Transportation). For a single individual in Franklin County, the National Standard for Food, Clothing, and Other necessities is $812 per month. While specific IRS local housing standards for Franklin County, AL are not published, the IRS will evaluate your actual housing expenses against local benchmarks. The overarching goal of this assessment is to determine if you meet the criteria for economic hardship under IRC §6343(a)(1)(D), which can lead to the release of a levy. This data is rigorously derived from sources such as IRS.gov, Bureau of Labor Statistics (BLS) Consumer Expenditure Survey, and US Census Bureau American Community Survey data.

While specific IRS Local Standards for Housing and Utilities for Franklin County, AL are not published as a fixed amount, the IRS will evaluate a taxpayer's actual housing expenses. For context, the HUD FY2025 Fair Market Rent (FMR) for a 2-bedroom residence in Franklin County, AL is $880.0 per month. This FMR serves as a strong indicator of reasonable housing costs in the area. If your actual housing expenses, including utilities, exceed the IRS's unstated benchmark or the FMR, you may be able to argue for a deviation from the standard. Internal Revenue Manual (IRM) 5.15.1.10 allows for such deviations if the taxpayer can demonstrate that their actual necessary expenses are higher than the published standards. This is particularly relevant in areas where housing costs might be disproportionately high relative to income. Unfortunately, regional Shelter Consumer Price Index (CPI) data is not available for this specific region, which might otherwise provide additional support for increased housing costs. Documenting all housing-related expenses is critical when submitting Form 433-A.

Beyond housing, the IRS allows for essential living expenses across several National and Local Standard categories. For food, clothing, and other necessary items, the IRS National Standards dictate allowances based on household size, ranging from $812 for a single person to $1983 for a family of four, with an additional $357 for each additional person beyond four. These figures are based on the Bureau of Labor Statistics Consumer Expenditure Survey. Healthcare costs are also accounted for, with a National Standard allowance of $75 per person per month for individuals under 65, and $153 per person per month for those 65 and over, derived from the Medical Expenditure Panel Survey. For transportation in Franklin County, AL, the IRS Local Standards allow for significant expenses: $588 per month for the ownership costs of one car and $270 per month for operating costs, totaling $858 for one vehicle. For two vehicles, the ownership allowance is $1176, making the total transportation allowance $1446. These transportation allowances are based on Bureau of Labor Statistics data and American Automobile Association operating costs, acknowledging the necessity of reliable transportation for employment.

For taxpayers in Franklin County, Alabama, facing significant financial hardship, the IRS may designate their account as Currently Not Collectible (CNC). This status means the IRS temporarily suspends active collection efforts because you lack the ability to pay your tax debt. To qualify, you must demonstrate through Form 433-A that your essential monthly expenses exceed your income. For example, a single filer in Franklin County, AL, might have allowable expenses totaling $2625 per month, calculated as follows: $880.0 (using a 2BR HUD FMR as a proxy for housing) + $812 (National Standard for Food, Clothing, and Other) + $75 (National Standard for Healthcare, under 65) + $858 (Local Standard for Transportation, one car). If your net monthly income is less than this total, you may qualify for CNC. IRM 5.16.1 outlines the procedures for CNC status. While CNC stops collection, interest and penalties continue to accrue, and the IRS will periodically review your financial situation. Importantly, the 10-year Collection Statute Expiration Date (CSED) under IRC §6502 continues to run during CNC status, meaning it does not extend the time the IRS has to collect the tax, which can be a strategic advantage. An IRS levy, such as a wage levy (Form 668-W) or bank levy (Form 668-A), can be released under IRC §6343 if it creates an economic hardship, often a precursor to CNC status.