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IRS Wage Levy & Hardship Standards for Montezuma County, Colorado

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

Understanding IRS Collection Standards in Montezuma County

When facing IRS collection actions in Montezuma County, Colorado, understanding the IRS Collection Financial Standards is crucial for determining your ability to pay. The IRS uses Form 433-A, Collection Information Statement for Wage Earners and Self-Employed Individuals, to assess your financial situation. This form meticulously calculates your disposable income by subtracting necessary living expenses from your gross income. These allowable expenses are categorized into National Standards (like food and clothing) and Local Standards (such as housing and transportation). For instance, a single individual in Montezuma County is generally allowed $812 monthly for food, clothing, and other necessities, as per IRS National Standards derived from Bureau of Labor Statistics data. While specific local housing standards for Montezuma County are not published as a fixed dollar amount by the IRS, actual necessary expenses are considered, guided by US Census Bureau data. 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).

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

For Montezuma County, Colorado, the IRS Collection Financial Standards do not provide a specific fixed dollar amount for Housing & Utilities, reflecting as $N/A. In such cases, the IRS generally allows taxpayers to claim their actual, reasonable housing expenses. This is where the US Department of Housing & Urban Development (HUD) Fair Market Rent (FMR) data becomes a critical benchmark. For FY2025, the HUD FMR for a 2-bedroom unit in Montezuma County is $1120.0 per month. If your actual rent or mortgage payment in Montezuma County exceeds the general local standard (or if no specific standard is published), you can argue for a deviation based on your actual necessary expenses, as outlined in Internal Revenue Manual (IRM) 5.15.1.10. Emphasizing that your legitimate housing costs, such as the $1120.0 for a 2BR, are necessary and reasonable strengthens your case for a higher expense allowance. Unfortunately, regional Shelter CPI data for Montezuma County is not available from the Bureau of Labor Statistics for a direct year-over-year comparison, but the HUD FMR still provides a strong basis for reasonable housing costs.

Food, Healthcare & Transportation Allowances

In Montezuma County, Colorado, the IRS allows specific amounts for essential living expenses. For food, clothing, and other miscellaneous items, the IRS National Standards, based on the Bureau of Labor Statistics Consumer Expenditure Survey, provide a monthly allowance of $812 for a single person, escalating to $1983 for a family of four. Healthcare costs are also factored in, with a monthly out-of-pocket allowance of $75 per person under 65 and $153 per person 65 and over, derived from the Medical Expenditure Panel Survey. For transportation, Montezuma County residents can claim a monthly allowance based on IRS Local Standards. If you own one car, the allowance is $588 for ownership costs plus an additional $270 for operating costs in this region, totaling $858 per month. These figures, rooted in Bureau of Labor Statistics data and American Automobile Association operating costs, are critical components in calculating your total allowable expenses on Form 433-A, directly impacting your ability to pay tax liabilities.

Qualifying for Currently Not Collectible (CNC) Status in Colorado

For taxpayers in Montezuma County, Colorado, experiencing financial hardship, Currently Not Collectible (CNC) status offers a vital reprieve from aggressive IRS collection. To qualify, you must demonstrate, usually through Form 433-A, Collection Information Statement, that your allowable monthly expenses meet or exceed your monthly income, leaving no disposable income to pay your tax debt. For example, a single filer in Montezuma County could calculate their total allowable expenses using the HUD FMR for a 2-bedroom ($1120.0 for housing), plus $812 for food, clothing, and other items, $75 for healthcare (under 65), and $858 for one-car transportation. This totals $2065.0 + $812 + $75 + $858 = $2815.0 per month. If your gross monthly income is less than or equal to this amount, you may qualify for CNC. IRM 5.16.1 outlines the procedures for CNC determinations, and if granted, the IRS will temporarily cease collection efforts, including releasing any existing levies under IRC §6343. Importantly, CNC status does not forgive the debt; rather, it pauses collection while the statutory period for collection (CSED) continues to run, generally 10 years from assessment under IRC §6502. This means CNC does not extend the 10-year collection window.

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Frequently Asked Questions

For Montezuma County, Colorado, the IRS does not publish a specific fixed dollar amount for Housing & Utilities in its Collection Financial Standards, listing it as $N/A. This means the IRS will generally consider your actual, reasonable housing expenses. A useful benchmark is the HUD FY2025 Fair Market Rent (FMR), which sets a 2-bedroom unit at $1120.0 per month. If your actual housing costs are reasonable and necessary, they can be claimed on Form 433-A. If your expenses exceed this, you can request a deviation per IRM 5.15.1.10. This is crucial for accurately determining your ability to pay and preventing excessive levies.
To qualify for Currently Not Collectible (CNC) status in Colorado, including Montezuma County, you must demonstrate to the IRS that you lack the financial ability to pay your tax debt. This is primarily done by submitting a detailed Form 433-A, Collection Information Statement, outlining your income, assets, and allowable monthly expenses. The IRS compares your income to your total allowable expenses, which include National Standards ($812 for a single person's food/clothing) and Local Standards (like $858 for one-car transportation, and your actual reasonable housing costs, such as the $1120.0 HUD FMR for a 2BR). If your expenses meet or exceed your income, the IRS may grant CNC status, temporarily halting collection efforts per IRM 5.16.1. This status is reviewed periodically, but it does not stop interest and penalties from accruing, nor does it extend the 10-year Collection Statute Expiration Date (CSED) under IRC §6502.
When the IRS issues a wage levy (Form 668-W) in Montezuma County, Colorado, the amount taken from your paycheck is not a fixed percentage but is determined by specific exemption tables in IRS Publication 1494. For 2025, a single taxpayer with zero dependents is exempt $1096.67 per month. If that same single taxpayer claims one dependent, their exemption increases to $1680.0 per month. For married taxpayers filing jointly with zero dependents, the exemption is also $1096.67, but with one dependent, it rises to $2286.67 per month. The IRS will levy the amount of your net pay that exceeds these specified exemption figures. Understanding these precise amounts is critical for taxpayers facing a Form 668-W, as it directly impacts your take-home pay and financial stability.
If your rent in Montezuma County, Colorado, exceeds the IRS's unstated local standard (which is $N/A for Housing & Utilities), you can, and should, argue for a deviation. The IRS Collection Financial Standards allow for such deviations when actual, necessary expenses are higher than the published figures, as long as they are reasonable. For example, if your actual 2-bedroom rent is $1250.0, while the HUD FY2025 Fair Market Rent for a 2BR in Montezuma County is $1120.0, you can present documentation (lease agreement, utility bills) on Form 433-A to justify your higher expenses. IRM 5.15.1.10 specifically addresses these deviation requests, emphasizing that taxpayers are entitled to a reasonable amount for basic living expenses. Successfully arguing for a deviation can significantly reduce your calculated disposable income, potentially leading to a lower payment agreement or even Currently Not Collectible status.
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 clock typically starts from the date the tax was assessed. It's crucial to understand that certain actions can pause or extend this period. For instance, filing for bankruptcy, 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) temporarily halts active collection efforts, it does not stop the CSED from running. Therefore, pursuing CNC status can be a strategic way for taxpayers in Montezuma County, Colorado, to weather a financial hardship while the statutory collection period continues to tick down, potentially leading to the expiration of the debt.

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