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Ouray County, Colorado: Navigating IRS Wage Levy & Hardship Status

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

Understanding IRS Collection Standards in Ouray County

For taxpayers in Ouray County, Colorado, facing IRS collection actions, understanding the Internal Revenue Service's financial standards is crucial. The IRS uses these standards, outlined on Form 433-A (Collection Information Statement for Wage Earners and Self-Employed Individuals), to determine a taxpayer's ability to pay and calculate their disposable income. These allowances are categorized into National Standards (Food, Clothing, Personal Care, Healthcare) and Local Standards (Housing, Utilities, Transportation). For instance, a single individual in Ouray County is allotted $812 monthly for Food, Clothing, and Other necessities, derived from the Bureau of Labor Statistics Consumer Expenditure Survey. While specific Housing & Utilities standards are not published for Ouray County, actual, necessary expenses are considered. Understanding these figures is vital when asserting an economic hardship under Internal Revenue Code (IRC) §6343(a)(1)(D) to prevent or release a levy. This data is rigorously compiled from IRS.gov Collection Financial Standards, based on comprehensive analysis by the US Census Bureau and the Bureau of Labor Statistics.

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

Ouray County, Colorado, presents a unique situation regarding IRS Housing and Utilities Local Standards, as the IRS lists this allowance as "N/A" for all household sizes. This means taxpayers are expected to substantiate their actual, necessary housing and utility expenses, rather than being limited to a pre-set amount. This absence of a specific standard can be advantageous for taxpayers, as it allows for a more detailed justification of their true living costs. For comparison, the Department of Housing and Urban Development (HUD) Fair Market Rent (FMR) for Ouray County in FY2025 sets a 2-bedroom unit at $1460.0 per month. If a taxpayer's actual housing expenses exceed what the IRS might otherwise deem reasonable in a county with a published standard, this situation strengthens an argument for a deviation. Internal Revenue Manual (IRM) 5.15.1.10 outlines the procedures for allowing expenses that exceed National or Local Standards based on a taxpayer's facts and circumstances. Unfortunately, specific Regional Shelter CPI data year-over-year for this region is not available from the Bureau of Labor Statistics, which could further illustrate local housing cost pressures.

Food, Healthcare & Transportation Allowances

Beyond housing, the IRS provides National Standards for essential living expenses. For Ouray County residents, the monthly Food, Clothing, and Other allowance ranges from $812 for a single person to $1983 for a family of four, with an additional $357 for each extra person, as per the Bureau of Labor Statistics Consumer Expenditure Survey. This $812 for a single individual includes $449 for food, $44 for housekeeping supplies, $99 for apparel and services, $45 for personal care products, and $175 for miscellaneous items. Healthcare costs are also accounted for with 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 Ouray County, the IRS Local Standards allow $588 for the ownership of one car and $270 for operating costs in the region, totaling $858 per month for one vehicle. For two cars, the allowance is $1176 for ownership and the same $270 for operating, totaling $1446, based on Bureau of Labor Statistics data and American Automobile Association operating costs.

Qualifying for Currently Not Collectible (CNC) Status in Colorado

Achieving Currently Not Collectible (CNC) status in Colorado can provide vital relief from IRS enforced collection actions like wage levies (Form 668-W) and bank levies (Form 668-A). To qualify, a taxpayer must demonstrate that their income is insufficient to cover basic living expenses, leaving no disposable income to pay their tax debt. This determination is made after submitting Form 433-A, where the IRS compares the taxpayer's income against their total allowable expenses, including the National and Local Standards. For example, a single filer in Ouray County with $1460.0 for housing (using HUD FMR for a 2BR as a proxy for actual expense given the N/A standard), $812 for food/clothing, $75 for healthcare (under 65), and $858 for transportation, would have total allowable expenses of $3205.0. If their net income is less than this, they may qualify for CNC. IRM 5.16.1 details the procedures for placing an account in CNC status, which means the IRS will temporarily cease active collection efforts. Critically, while CNC status provides a reprieve, it does not stop the accrual of penalties and interest, nor does it extend the Collection Statute Expiration Date (CSED) under IRC §6502, which generally limits the IRS to 10 years to collect a tax debt. An approved CNC status can lead to the release of a levy under IRC §6343.

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Frequently Asked Questions

For Ouray County, Colorado, the IRS Collection Financial Standards for Housing and Utilities are listed as "N/A" for all household sizes in 2025. This means the IRS does not have a pre-determined cap for housing costs in this specific area. Instead, taxpayers are expected to document and justify their actual, necessary housing and utility expenses on Form 433-A. For context, the HUD Fair Market Rent for a 2-bedroom unit in Ouray County is $1460.0 per month. If your actual, reasonable expenses exceed standard allowances in other areas, this 'N/A' designation provides a stronger basis for the IRS to consider your full housing costs when determining your ability to pay, in accordance with IRM 5.15.1.10.
To qualify for Currently Not Collectible (CNC) status in Colorado, you must demonstrate to the IRS that you lack the financial ability to pay your tax debt after covering your necessary living expenses. This process begins by filing a comprehensive Form 433-A, Collection Information Statement for Wage Earners and Self-Employed Individuals, which details your income, assets, and monthly expenses. The IRS will compare your net income against the allowable National and Local Standards for expenses, such as the $812 for Food and Other for a single person and your actual housing costs in Ouray County (since the standard is N/A). If your total allowable expenses equal or exceed your income, leaving no disposable income, you may be granted CNC status. This temporary relief, outlined in IRM 5.16.1, means the IRS suspends active collection efforts, potentially leading to the release of levies under IRC §6343.
The amount the IRS can take from your paycheck in Ouray County, Colorado, is determined by specific calculations outlined in IRS Publication 1494 and served via a Form 668-W, Notice of Levy on Wages, Salary, and Other Income. This amount is not a fixed percentage but depends on your filing status and the number of dependents you claim. For example, a single individual with zero dependents will have $1096.67 of their monthly wages exempt from levy in 2025. A married individual filing jointly with one dependent would have $2286.67 exempt monthly. The IRS levies only the amount of your disposable earnings that exceeds these statutory exemption amounts. Colorado generally follows federal limits, which are also governed by the Consumer Credit Protection Act (CCPA), restricting garnishments to 25% of disposable earnings or the amount by which disposable earnings exceed 30 times the federal minimum wage, whichever is less.
In Ouray County, Colorado, the IRS does not publish a specific Housing and Utilities Local Standard, listing it as "N/A." This means that if your rent or mortgage exceeds what might be considered a standard allowance in other areas, you have a stronger opportunity to justify your actual, necessary housing expenses. For instance, the HUD Fair Market Rent for a 2-bedroom unit in Ouray County is $1460.0. When submitting Form 433-A, you should fully document your actual housing costs. The IRS recognizes that necessary expenses can exceed standard allowances in certain circumstances, as detailed in IRM 5.15.1.10. By providing clear evidence of your reasonable and necessary housing expenses, you can argue for their full inclusion in your allowable expenses, which is critical for demonstrating economic hardship and potentially qualifying for relief like Currently Not Collectible (CNC) status.
The IRS generally has 10 years to collect a tax debt, a period known as the Collection Statute Expiration Date (CSED), established under Internal Revenue Code (IRC) §6502. This 10-year clock typically starts from the date the tax was assessed. However, certain events can pause or extend this period, such as filing an Offer in Compromise (Form 656), requesting a Collection Due Process hearing, or being outside the country for an extended period. While achieving Currently Not Collectible (CNC) status (IRM 5.16.1) temporarily stops active collection efforts, it does not extend the CSED. This means the 10-year clock continues to run even while your account is in CNC status. If the CSED expires while your account is CNC, the debt becomes uncollectible, offering a potential path to resolution without full payment. Understanding your CSED is a critical component of any long-term tax resolution strategy.

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