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Phillips County, Colorado IRS Wage Levy & Hardship Assistance

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

Understanding IRS Collection Standards in Phillips County

Navigating IRS enforced collection in Phillips County, Colorado, requires a precise understanding of the IRS Collection Financial Standards. When the IRS evaluates your ability to pay a tax debt, they utilize Form 433-A, Collection Information Statement for Wage Earners and Self-Employed Individuals, to meticulously calculate your disposable income. This calculation relies on a combination of National and Local Standards, derived from authoritative sources like IRS.gov, the Bureau of Labor Statistics (BLS), and the U.S. Census Bureau. For instance, a single individual in Phillips County is allowed $812 monthly for food, clothing, and other necessities under the National Standards. While the IRS does not publish a specific housing allowance for Phillips County, they consider actual, reasonable expenses. If your financial situation demonstrates that collection would create an economic hardship, as defined under Internal Revenue Code (IRC) §6343(a)(1)(D), the IRS is mandated to release or refrain from issuing a levy.

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

For taxpayers in Phillips County, CO, the IRS does not publish a specific local standard for housing and utilities. Instead, the IRS considers your actual, reasonable housing expenses. A crucial benchmark for what constitutes 'reasonable' housing costs is the U.S. Department of Housing and Urban Development (HUD) Fair Market Rent (FMR) data. For example, the FY2025 HUD FMR for a 2-bedroom residence in this area is $1020.0 per month. If your actual housing expenses exceed the typical local costs, or if you need to justify an expense in the absence of a specific IRS standard, referencing HUD FMR data is vital. Internal Revenue Manual (IRM) 5.15.1.10 outlines the process for requesting a deviation from standard allowances if your necessary expenses exceed the published amounts. Demonstrating that your rent, such as $1020.0 for a 2BR, is consistent with local FMR strengthens your argument for a deviation, especially since specific regional shelter CPI data is not available for this area to track year-over-year changes.

Food, Healthcare & Transportation Allowances

Beyond housing, the IRS Collection Financial Standards provide specific allowances for other essential living expenses in Phillips County, CO. For food, clothing, and other miscellaneous items, the National Standards, based on the BLS Consumer Expenditure Survey, allocate $812 per month for a single individual, escalating to $1983 for a family of four. Healthcare expenses are also standardized, with an allowance of $75 per person under 65 and $153 per person for those 65 and over, derived from the Medical Expenditure Panel Survey. Transportation allowances are critical for employment and daily living; for Phillips County, the IRS Local Standards permit $588 per month for one owned car (ownership costs) plus an additional $270 for operating costs in the region. This totals $858 per month for a single vehicle, based on BLS data and American Automobile Association operating costs. These allowances are crucial for determining your ability to pay and for negotiating a resolution.

Qualifying for Currently Not Collectible (CNC) Status in Colorado

Achieving Currently Not Collectible (CNC) status in Phillips County, Colorado, is a critical relief measure for taxpayers facing severe financial hardship. To qualify, you must submit a comprehensive Form 433-A, detailing your income, assets, and all necessary living expenses. The IRS will compare your total allowable expenses against your gross income. For a single filer, this might include a reasonable housing expense (e.g., using the 1-bedroom HUD FMR of $780.0 as a guideline for actual rent), plus $812 for food, clothing, and other items, $75 for healthcare (if under 65), and $858 for one-car transportation. If your total necessary expenses meet or exceed your income, leaving no disposable income for tax payments, the IRS may place you in CNC status. IRM 5.16.1 outlines the procedures for CNC, and IRC §6343 mandates the release of a levy if it creates economic hardship. Importantly, while CNC status pauses active collection, it does not extend the Collection Statute Expiration Date (CSED) under IRC §6502, which generally limits the IRS to 10 years from the tax assessment date to collect the debt.

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Frequently Asked Questions

The IRS does not publish a specific housing allowance for Phillips County, CO. Instead, taxpayers are expected to claim their actual, reasonable housing and utility expenses on Form 433-A. For reference, the U.S. Department of Housing and Urban Development (HUD) Fair Market Rent (FMR) for FY2025 provides benchmarks such as $760.0 for a studio apartment, $780.0 for a 1-bedroom, and $1020.0 for a 2-bedroom residence in this area. These figures can be used to support the reasonableness of your claimed expenses, especially when requesting a deviation if your costs exceed typical local averages, as outlined in 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 without experiencing economic hardship. This involves submitting IRS Form 433-A, Collection Information Statement, which details your income, assets, and monthly necessary living expenses. The IRS evaluates your income against established National Standards (e.g., $812 for a single person's food, clothing, and other expenses, or $1478 for a two-person household) and Local Standards (e.g., $75 per person under 65 for healthcare, $858 for one-car transportation). If your allowable expenses meet or exceed your income, leaving no funds for tax payments, the IRS may grant CNC status under IRM 5.16.1.
When the IRS issues a wage levy via Form 668-W, Notice of Levy on Wages, Salary, and Other Income, the amount they can seize from your paycheck is determined by IRS Publication 1494, 'Table for Figuring Amount Exempt from Levy.' For 2025, specific exempt amounts vary by filing status and dependents. For example, a single individual with zero dependents has $1096.67 exempt per month, while a single individual with one dependent has $1680.0 exempt. For a married individual filing jointly with one dependent, $2286.67 is exempt. Any income above these thresholds is subject to the levy. These federal limits supersede state wage garnishment laws in Colorado, which generally follow the Consumer Credit Protection Act (CCPA) limits (25% of disposable earnings or the amount above 30 times the federal minimum wage).
If your rent in Phillips County, CO, exceeds what you perceive as the IRS standard, it's important to note that the IRS does not publish a specific local housing standard for this area. Instead, the IRS considers your actual, reasonable expenses. You should document your actual rent, which can be supported by local market data such as the HUD FY2025 Fair Market Rent (e.g., $780.0 for a 1-bedroom or $1020.0 for a 2-bedroom). If your necessary housing expense is higher than what the IRS might typically allow based on broader guidelines, you can request a deviation from the standard allowances, as outlined in Internal Revenue Manual (IRM) 5.15.1.10. Providing clear justification for your higher expense is crucial for the IRS to approve it.
The IRS generally has 10 years from the date a tax liability is assessed to collect the debt. This period is known as the Collection Statute Expiration Date (CSED), as mandated by Internal Revenue Code (IRC) §6502. While certain actions, such as filing an Offer in Compromise (Form 656) or requesting a Collection Due Process hearing, can temporarily suspend or extend the CSED, being placed in Currently Not Collectible (CNC) status does not extend this 10-year collection window. CNC status merely pauses active collection efforts, allowing the CSED to continue running. Understanding your CSED is critical for developing an effective tax resolution strategy, particularly if you are considering options like CNC or an Offer in Compromise.

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