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Navigating IRS Wage Levy and Hardship in Moody County, South Dakota

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

Understanding IRS Collection Standards in Moody County

For taxpayers in Moody County, South Dakota, facing IRS enforced collection actions, understanding the IRS Collection Financial Standards is paramount. These standards, utilized by the IRS when evaluating a taxpayer's ability to pay through Form 433-A, Collection Information Statement, determine disposable income. The IRS employs National Standards for essential expenses like food and clothing, and Local Standards for housing, utilities, and transportation. For instance, a single individual in Moody County is allowed $812 monthly for food, clothing, and other necessities, based on the Bureau of Labor Statistics Consumer Expenditure Survey. While specific IRS Local Housing & Utilities standards are not available for Moody County, actual expenses must be documented. The IRS uses these figures to determine if an economic hardship exists, potentially leading to a levy release under IRC §6343(a)(1)(D). This critical data is derived from official sources including IRS.gov, the Bureau of Labor Statistics, and the U.S. Census Bureau.

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

Taxpayers in Moody County, South Dakota, will find that the IRS Collection Financial Standards do not provide a specific Local Standard for Housing & Utilities for this area, listing it as $N/A. In such cases, the IRS evaluates actual, reasonable housing expenses. To provide context, the U.S. Department of Housing & Urban Development (HUD) sets the FY2025 Fair Market Rent (FMR) for a 2-bedroom unit in Moody County at $980.0 per month. If a taxpayer's actual housing costs exceed the IRS's unstated or a deemed reasonable amount, they may request a deviation from the standard, as outlined in Internal Revenue Manual (IRM) 5.15.1.10. Documenting that actual, necessary rent, such as $980.0 for a 2-bedroom apartment, is higher than what the IRS might otherwise allow significantly strengthens an argument for increased allowable expenses. While regional Shelter CPI data is not available for Moody County, the FMR provides a robust benchmark for housing costs.

Food, Healthcare & Transportation Allowances

Beyond housing, the IRS provides National Standards for Food, Clothing, and Other necessities, ensuring taxpayers in Moody County, SD, can cover basic living costs. A single person is allowed $812 per month, while a family of four can claim $1983, based on the Bureau of Labor Statistics Consumer Expenditure Survey. Healthcare is covered by National Standards for Out-of-Pocket Healthcare, allowing $75 per person under 65 and $153 per person aged 65 and over monthly, derived from the Medical Expenditure Panel Survey. For transportation in Moody County, the IRS Local Standards permit $588 for the ownership costs of one car and $270 for operating costs, totaling $858 per month for one vehicle. For two vehicles, these allowances increase to $1176 for ownership and $270 for operating, totaling $1446. These figures, based on Bureau of Labor Statistics data and American Automobile Association operating costs, are crucial for calculating a taxpayer's disposable income.

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

Achieving Currently Not Collectible (CNC) status in South Dakota, particularly for residents of Moody County, requires demonstrating to the IRS that you lack the ability to pay your tax debt due to financial hardship. This process starts by submitting a comprehensive Form 433-A, Collection Information Statement, detailing your income, assets, and allowable expenses. The IRS will compare your total monthly income against your total allowable expenses, using the National and Local Standards discussed. For a single filer in Moody County, a sample calculation might involve: $980.0 for housing (using HUD FMR for a 2BR as a practical estimate given IRS N/A), $812 for food/clothing, $75 for healthcare (under 65), and $858 for transportation, totaling $2725.0 in monthly allowable expenses. If your income does not exceed these essential expenses, the IRS may place your account in CNC status, as per IRM 5.16.1. This action can lead to the release of an existing levy under IRC §6343. Importantly, while CNC status halts active collection, it does not stop interest and penalties from accruing, nor does it extend the Collection Statute Expiration Date (CSED) under IRC §6502, which generally limits the IRS to 10 years for collection.

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Frequently Asked Questions

For Moody County, South Dakota, the IRS Collection Financial Standards for Housing & Utilities are listed as 'N/A' for 2025. This means the IRS does not have a pre-determined standard amount for housing in this specific area. Instead, taxpayers must document their actual, reasonable housing expenses on Form 433-A, Collection Information Statement. For reference, the U.S. Department of Housing & Urban Development (HUD) indicates the FY2025 Fair Market Rent (FMR) for a 2-bedroom unit in Moody County is $980.0 per month. While this isn't an IRS standard, it provides a benchmark for what the IRS might consider a reasonable housing expense when evaluating a taxpayer's financial situation for an Offer in Compromise or Currently Not Collectible status.
To qualify for Currently Not Collectible (CNC) status in South Dakota, you must demonstrate to the IRS that paying your tax debt would cause economic hardship. The process involves submitting Form 433-A, Collection Information Statement, to detail your financial situation. The IRS will compare your total monthly income against your total allowable monthly expenses, which include National Standards for food ($812 for a single person) and healthcare ($75 per person under 65), and Local Standards for transportation ($858 for one car ownership and operating). Since Moody County has no specific IRS housing standard, actual reasonable expenses are considered. If your necessary living expenses exceed your income, making it impossible to pay your tax debt, the IRS may grant CNC status under IRM 5.16.1. This can lead to a levy release under IRC §6343(a)(1)(D).
The amount the IRS can levy from your paycheck in Moody County, South Dakota, is determined by specific exemptions outlined in IRS Publication 1494. For a single taxpayer with zero dependents, the monthly exempt amount for 2025 is $1096.67. If that single taxpayer claims one dependent, the exempt amount increases to $1680.0 per month. For a married individual filing jointly with zero dependents, the same $1096.67 is exempt, rising to $2286.67 with one dependent. The IRS uses Form 668-W, Notice of Levy on Wages, Salary, and Other Income, to notify your employer. Any income exceeding these exempt amounts is subject to the levy. South Dakota generally follows federal Consumer Credit Protection Act (CCPA) limits, which typically restrict garnishment to 25% of disposable earnings or the amount by which disposable earnings exceed 30 times the federal minimum wage, whichever is less, but IRS levies often take precedence and can be more aggressive.
In Moody County, South Dakota, the IRS does not publish a specific Local Standard for Housing & Utilities, listing it as $N/A. This means the IRS will evaluate your actual, necessary housing expenses. If your documented rent, for example, the HUD FY2025 Fair Market Rent for a 2-bedroom unit at $980.0, exceeds what the IRS might informally consider reasonable, you have the right to request a deviation from the standard. Under IRM 5.15.1.10, taxpayers can present documentation, such as lease agreements, utility bills, and proof of payment, to justify their actual, necessary expenses. Successfully demonstrating that your higher housing costs are essential and unavoidable can increase your total allowable expenses, reducing your calculated disposable income and potentially qualifying you for a more favorable collection alternative, such as an Offer in Compromise or 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 defined by IRC §6502. This 10-year clock typically starts from the date the tax was assessed. However, certain events can pause or extend this collection period. For instance, filing for bankruptcy, requesting a Collection Due Process hearing, or submitting an Offer in Compromise can suspend the CSED. While being placed in Currently Not Collectible (CNC) status, as detailed in IRM 5.16.1, temporarily halts active collection efforts, it does not stop the 10-year CSED from running. Therefore, pursuing CNC status in Moody County, South Dakota, can be a strategic move to allow the CSED to expire, effectively eliminating the debt without payment, provided the statutory period is not otherwise extended.

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