Protecting Your Income: IRS Wage Levy & Hardship in Johnston County, Oklahoma

When the IRS assesses your ability to pay a tax debt, they utilize specific financial benchmarks known as Collection Financial Standards, which are critical for completing Form 433-A, Collection Information Statement for Wage Earners and Self-Employed Individuals. These standards help determine your disposable income, which is the amount available for tax payments. While the IRS provides National Standards for categories like Food and Clothing, and Local Standards for Transportation, Johnston County, Oklahoma currently does not have a specific IRS Local Standard for Housing and Utilities. For a single individual, the National Standard for Food, Clothing & Other is $812 per month, derived from Bureau of Labor Statistics Consumer Expenditure Survey data. The IRS references these figures, along with data from IRS.gov, the US Census Bureau, and other sources, to ensure a fair assessment. If your allowable expenses exceed your income, the IRS may determine that an economic hardship exists, potentially leading to a levy release under IRC §6343(a)(1)(D).

For taxpayers in Johnston County, Oklahoma, it's crucial to understand that the IRS Collection Financial Standards currently list 'N/A' for Housing and Utilities allowances, meaning there is no predetermined IRS Local Standard for this region. In such cases, the IRS will generally consider a taxpayer's actual, reasonable, and necessary housing expenses. For comparison, the US Department of Housing & Urban Development (HUD) reports the FY2025 Fair Market Rent (FMR) for Johnston County, OK, as $950.0 for a two-bedroom residence. This HUD FMR data provides a strong benchmark for what constitutes a reasonable housing expense in the area. If your actual rent or mortgage payments exceed what might be considered reasonable by the IRS, you may be able to argue for an allowance based on your specific circumstances, as outlined in Internal Revenue Manual (IRM) 5.15.1.10, 'Deviation from National and Local Standards.' This deviation is particularly relevant when local IRS standards are unavailable or insufficient. Unfortunately, regional Shelter CPI (Consumer Price Index) data from the Bureau of Labor Statistics is not available for this specific region to show year-over-year changes.

Beyond housing, the IRS Collection Financial Standards allocate specific amounts for other essential living expenses. For food, clothing, and miscellaneous personal items, the National Standards provide $812 per month for a single person, $1478 for a two-person household, and up to $1983 for a four-person household, with an additional $357 for each extra person. These figures are based on the Bureau of Labor Statistics Consumer Expenditure Survey. Healthcare expenses are also standardized: $75 per month for individuals under 65 and $153 per month for those 65 and over, per person. For a family of four, all under 65, this amounts to $300 per month. These allowances are derived from the Medical Expenditure Panel Survey. Transportation is another critical category with Local Standards for Johnston County, OK. The IRS allows $588 per month for car ownership (one car) and an additional $270 per month for operating costs in this region, totaling $858 per month for a single vehicle. For two cars, the ownership allowance is $1176, bringing the total with operating costs to $1446. These transportation figures are based on Bureau of Labor Statistics data and American Automobile Association operating costs.

If your essential living expenses consistently exceed your income, you may qualify for Currently Not Collectible (CNC) status, a temporary hardship designation that halts most IRS collection actions, including wage and bank levies. To initiate this process, you must accurately complete and submit Form 433-A, Collection Information Statement, detailing all your income, assets, and expenses. The IRS will compare your total allowable expenses against your verifiable income. For a single filer in Johnston County, OK, a sample calculation might include a reasonable housing expense (e.g., $950.0 based on HUD FMR for a 2BR), plus $812 for food/clothing/other, $75 for healthcare (under 65), and $858 for one-car transportation, totaling $2695.0 in monthly expenses. If your net income is less than this total, you could qualify for CNC status. Internal Revenue Manual (IRM) 5.16.1 outlines the procedures for CNC determinations. While in CNC status, the IRS will generally release any existing levies, such as a wage levy (Form 668-W) or bank levy (Form 668-A), under IRC §6343. It is important to note that CNC status does not forgive the debt; it only pauses collection efforts, and the 10-year Collection Statute Expiration Date (CSED) under IRC §6502 continues to run, meaning the IRS's time to collect is not extended by CNC status.