Franklin County, Kentucky IRS Wage Levy & Hardship Relief

Taxpayers in Franklin County, Kentucky, facing IRS collection actions, including wage or bank levies, must understand the IRS Collection Financial Standards. These standards are crucial for determining a taxpayer's ability to pay, often documented on IRS Form 433-A, Collection Information Statement for Wage Earners and Self-Employed Individuals. The IRS calculates a taxpayer's disposable income by subtracting necessary living expenses from their gross income, using a combination of National and Local Standards. For a single individual in Franklin County, the National Standard for Food, Clothing & Other is $812 per month. While specific local housing and utility standards are not provided for Franklin County, KY, by the IRS, other national and local standards apply. If a taxpayer's allowable expenses exceed their income, they may qualify for economic hardship relief under IRC §6343(a)(1)(D). These standards are meticulously derived from various sources, including IRS.gov, Bureau of Labor Statistics (BLS) data, and US Census Bureau American Community Survey data.

For Franklin County, Kentucky, the IRS Collection Financial Standards do not provide a specific local allowance for Housing & Utilities. This means taxpayers cannot rely on a pre-set amount for this critical expense. However, the US Department of Housing & Urban Development (HUD) provides Fair Market Rent (FMR) data, which can be used to establish a reasonable housing expense. For instance, the HUD FY2025 FMR for a 2-bedroom residence in Franklin County, KY, is $1260.0 per month. If a taxpayer's actual, necessary housing expenses exceed the IRS's unstated or non-existent standard for their area, they can petition for a deviation. Internal Revenue Manual (IRM) section 5.15.1.10 outlines the process for requesting such deviations based on the specific facts and circumstances. When the HUD FMR, such as the $1260.0 for a 2BR, significantly exceeds any implicit or assumed IRS allowance, it strongly supports an argument for a deviation to allow for actual, reasonable housing costs. Unfortunately, regional shelter CPI data from the Bureau of Labor Statistics is not available for this specific region to show year-over-year changes, but the FMR provides a clear benchmark.

Beyond housing, the IRS Collection Financial Standards provide crucial allowances for other necessary living expenses. For food, clothing, and other necessities, the National Standards range from $812 per month for a single individual 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 monthly allowance of $75 per person under 65 and $153 per person for those 65 and over, derived from the Medical Expenditure Panel Survey. For transportation in Franklin County, Kentucky, the IRS Local Standards provide for both ownership and operating costs. For a single car, the ownership cost is $588 per month, while operating costs for this region are $270 per month, totaling $858 for one vehicle. For two vehicles, the ownership allowance is $1176, making the total $1446 per month. These transportation allowances are based on Bureau of Labor Statistics data and American Automobile Association operating costs, ensuring taxpayers can maintain employment and access essential services.

For taxpayers in Franklin County, Kentucky, facing severe financial hardship, Currently Not Collectible (CNC) status offers a temporary reprieve from active IRS collection. To qualify, you must demonstrate to the IRS that your allowable monthly expenses exceed your monthly income, leaving no disposable income to pay your tax debt. This process begins by submitting a comprehensive financial disclosure on IRS Form 433-A. For a single filer in Franklin County, a simplified calculation might look like this: using the HUD FMR for a 2BR ($1260.0) as a reasonable housing expense, combined with the National Standard for Food, Clothing & Other ($812), out-of-pocket healthcare ($75 for under 65), and one-car transportation ($858), the total allowable expenses could reach $3005.0. If your net monthly income is less than this total, you could qualify for CNC status. IRM 5.16.1 outlines the procedures for placing an account in CNC status, which can lead to the release of an existing levy under IRC §6343. Importantly, while CNC status halts collection, it does not stop interest and penalties from accruing, nor does it extend the Collection Statute Expiration Date (CSED), which is generally 10 years from the assessment date under IRC §6502.