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Lyman County, South Dakota: IRS Wage Levy, Bank Levy & Hardship Assistance

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

Understanding IRS Collection Standards in Lyman County

Navigating IRS collection actions in Lyman County, South Dakota, requires a precise understanding of the Collection Financial Standards used by the IRS. When evaluating a taxpayer's ability to pay, the IRS requires Form 433-A, Collection Information Statement for Wage Earners and Self-Employed Individuals. This form details income, expenses, assets, and liabilities. The IRS then calculates a taxpayer's disposable income by subtracting allowable expenses, which are largely based on National and Local Standards. For example, the National Standard for a single person's food allowance is $449, with a total 'Food, Clothing & Other' allowance of $812 per month, derived from the Bureau of Labor Statistics Consumer Expenditure Survey. While specific housing and utilities allowances are not provided for Lyman County, SD, the IRS does apply these standards to determine if an economic hardship exists, as defined under Internal Revenue Code (IRC) §6343(a)(1)(D). These critical financial benchmarks are published on IRS.gov and are meticulously compiled from sources like the US Census Bureau American Community Survey and Bureau of Labor Statistics data.

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

For taxpayers in Lyman County, South Dakota, it's crucial to understand that the IRS Collection Financial Standards currently list Housing & Utilities allowances as N/A for this region. This absence means the IRS does not have a pre-determined, fixed amount for housing expenses in Lyman County. In such cases, taxpayers must justify their actual necessary housing and utility expenses. A valuable benchmark for reasonable housing costs is the HUD FY2025 Fair Market Rent (FMR) data, which indicates $760.0 for a 1-bedroom unit and $1000.0 for a 2-bedroom unit in this area. If a taxpayer's actual housing expenses align with or exceed these HUD FMR figures, it provides a strong basis for a deviation from the standard (or lack thereof), as outlined in Internal Revenue Manual (IRM) 5.15.1.10. This IRM section permits revenue officers to allow actual, necessary expenses that exceed the established standards. While regional Shelter CPI data from the Bureau of Labor Statistics is not available for this specific region, the HUD FMR data remains a critical tool for advocating for adequate housing allowances.

Food, Healthcare & Transportation Allowances

Beyond housing, the IRS Collection Financial Standards provide clear guidelines for other essential living expenses in Lyman County, SD. The National Standards for 'Food, Clothing & Other' expenses are significant, ranging from $812 per month for a single individual to $1983 for a family of four, with an additional $357 for each subsequent person. These figures are based on the Bureau of Labor Statistics Consumer Expenditure Survey. For healthcare, the National Standards for Out-of-Pocket Healthcare are $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 monthly. These figures are derived from the Medical Expenditure Panel Survey. Transportation is also covered by Local Standards: a single car ownership allowance is $588 per month, with an additional $270 for operating costs in this region, totaling $858 monthly for one vehicle. For two vehicles, the allowance increases to $1176 for ownership, plus the $270 operating cost, for a total of $1446. These transportation allowances are based on Bureau of Labor Statistics data and American Automobile Association operating costs.

Qualifying for Currently Not Collectible (CNC) Status in South Dakota

Achieving Currently Not Collectible (CNC) status in South Dakota is a crucial relief option for taxpayers facing genuine financial hardship. To qualify, taxpayers must demonstrate to the IRS that their allowable monthly expenses meet or exceed their monthly income, leaving no funds available to pay their tax debt. This determination is made using Form 433-A, where the IRS compares your income against the Collection Financial Standards. For a single filer in Lyman County, SD, with no available housing standard, a compelling argument for actual housing expenses (e.g., using the 1-bedroom HUD FMR of $760.0), combined with National Standards like $812 for food, $75 for healthcare (under 65), and Local Standards for transportation totaling $858 (1 car), would result in total allowable expenses of approximately $2505.0. If your income is less than or equal to this amount, you may qualify for CNC. Under IRM 5.16.1, the IRS can place an account in CNC status, and per IRC §6343, any existing levies, such as a wage levy (Form 668-W) or bank levy (Form 668-A), would typically be released. It is vital to remember that while CNC pauses active collection, it does not erase the debt or extend the Collection Statute Expiration Date (CSED), which is generally 10 years from the date of assessment, as per IRC §6502.

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Frequently Asked Questions

For Lyman County, South Dakota, the IRS Collection Financial Standards currently list the Housing & Utilities allowance as N/A. This means there isn't a pre-set amount the IRS automatically allows. Instead, taxpayers must document and justify their actual, necessary housing and utility expenses. A valuable reference for what constitutes a reasonable housing expense in the area is the HUD FY2025 Fair Market Rent (FMR) data, which indicates $760.0 for a 1-bedroom unit and $1000.0 for a 2-bedroom unit. If your actual rent and utilities exceed what the IRS might otherwise allow or what a Revenue Officer deems reasonable, you can argue for a deviation based on IRM 5.15.1.10, which allows for necessary expenses above the standard when properly substantiated on Form 433-A.
To qualify for Currently Not Collectible (CNC) status in South Dakota, you must demonstrate to the IRS that you lack the financial ability to pay your tax debt. This involves submitting a detailed financial statement, typically Form 433-A, Collection Information Statement for Wage Earners and Self-Employed Individuals. The IRS will compare your monthly income against your allowable monthly expenses, which include National Standards for 'Food, Clothing & Other' ($812 for a single person), 'Out-of-Pocket Healthcare' ($75 per month for individuals under 65), and Local Standards for 'Transportation' ($858 for one car ownership and operating costs). For housing, since Lyman County has an 'N/A' standard, you would justify your actual necessary housing expenses, potentially referencing HUD FMR data like $760.0 for a 1-bedroom unit. If your total allowable expenses equal or exceed your income, the IRS may grant CNC status under IRM 5.16.1. This status signifies an economic hardship, and per IRC §6343, the IRS will typically release any active levies.
When the IRS issues a wage levy (Form 668-W, Notice of Levy on Wages, Salary, and Other Income) in Lyman County, SD, it does not take your entire paycheck. Instead, the IRS calculates an exempt amount based on your filing status and number of dependents, as detailed in IRS Publication 1494 (2025). For example, a single individual with zero dependents has a monthly exempt amount of $1096.67. A single individual with one dependent has a monthly exempt amount of $1680.0. For a married couple filing jointly with one dependent, the exempt amount is $2286.67. Only income above this exempt amount is subject to the levy, as authorized by IRC §6331. South Dakota generally follows federal limits for wage garnishment, which are typically 25% of disposable earnings or the amount by which disposable earnings exceed 30 times the federal minimum wage, whichever is less. However, the IRS levy calculation method, based on Publication 1494, often results in a higher exempt amount than standard state garnishments.
Since the IRS Collection Financial Standards currently list the Housing & Utilities allowance as 'N/A' for Lyman County, South Dakota, taxpayers are not bound by a specific pre-determined IRS standard. This situation actually provides an opportunity to justify your actual, necessary housing expenses. For instance, the HUD FY2025 Fair Market Rent for a 2-bedroom unit in this area is $1000.0. If your rent, combined with essential utilities, exceeds this or what a Revenue Officer might initially consider reasonable, you must provide documentation (e.g., lease agreements, utility bills) to substantiate these costs. Internal Revenue Manual (IRM) 5.15.1.10 explicitly allows for deviations where a taxpayer can demonstrate that their actual necessary living expenses exceed the standard amounts. By clearly showing that your housing costs are both necessary and reasonable for your household size and local market, you can ensure these expenses are fully considered in your ability-to-pay calculation on Form 433-A.
The IRS generally has 10 years to collect a tax debt, a period 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. However, certain actions can pause or 'toll' this statute of limitations, effectively extending the IRS's collection window. For example, submitting an Offer in Compromise (Form 656) or requesting a Collection Due Process (CDP) hearing will suspend the CSED. While being placed in Currently Not Collectible (CNC) status (IRM 5.16.1) means the IRS will temporarily cease active collection efforts due to economic hardship, it does not typically extend the CSED. During CNC status, the collection clock continues to run, meaning the debt could expire under the statute of limitations if the IRS does not find the taxpayer's financial situation improved sufficiently to resume collection before the 10 years are up. If a taxpayer is placed in CNC, any active levies, such as a wage levy (Form 668-W) or bank levy (Form 668-A), are typically released under IRC §6343.

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