Raleigh-Cary, North Carolina IRS Wage Levy & Hardship Relief

When facing IRS enforced collection actions like a wage levy (Form 668-W) or bank levy (Form 668-A), understanding your allowable living expenses is critical. The IRS uses Form 433-A, Collection Information Statement for Wage Earners and Self-Employed Individuals, to determine your ability to pay. This calculation relies on IRS National and Local Collection Financial Standards, which define reasonable amounts for essential living costs. For instance, a single individual in Raleigh-Cary, NC MSA is allotted $812 monthly for food, clothing, and other necessities, based on the Bureau of Labor Statistics Consumer Expenditure Survey. While Raleigh-Cary, NC MSA does not have a specific IRS local housing standard, the IRS will consider actual, necessary housing and utility expenses to prevent economic hardship, as outlined in IRC §6343(a)(1)(D). These standards are derived from comprehensive data sources including IRS.gov, the Bureau of Labor Statistics, and the US Census Bureau.

For taxpayers in Raleigh-Cary, NC MSA, the IRS Collection Financial Standards do not provide a specific fixed monthly housing and utilities allowance. Instead, the IRS permits taxpayers to claim their actual, necessary housing and utility expenses, provided they are reasonable and fully documented. This is a crucial distinction, as it allows for flexibility in areas where a fixed standard might not reflect true living costs. For context, the HUD FY2025 Fair Market Rent (FMR) for Raleigh-Cary, NC MSA is $1950.0 for a 1-bedroom apartment and $2140.0 for a 2-bedroom apartment. If your actual, necessary rent and utilities exceed what the IRS might initially deem reasonable, you can request a deviation from the standard under IRM 5.15.1.10. Documenting that your actual housing costs align with or are less than the local HUD FMR rates, such as $2140.0 for a 2-bedroom, significantly strengthens your argument for allowing these expenses. Unfortunately, regional shelter CPI data is not available for this specific region to provide a year-over-year comparison.

Beyond housing, the IRS allows specific amounts for other essential living expenses. For food, clothing, and other necessities, the IRS National Standards provide a monthly allowance ranging from $812 for a single individual to $1983 for a family of four, with an additional $357 for each additional person, derived from the Bureau of Labor Statistics Consumer Expenditure Survey. Healthcare expenses are also standardized: $75 per month for individuals under 65 and $153 per month for those 65 and over, per person. These figures are based on the Medical Expenditure Panel Survey. Transportation allowances for Raleigh-Cary, NC MSA are divided into ownership and operating costs. For one vehicle, the ownership cost is $588 per month, and the operating cost is $270 per month, totaling $858. For two vehicles, these figures double to $1176 for ownership and $540 for operating, totaling $1716. These transportation standards are based on Bureau of Labor Statistics data and American Automobile Association operating costs.

If your allowable living expenses exceed your monthly income, you may qualify for Currently Not Collectible (CNC) status under IRM 5.16.1. This status temporarily suspends IRS collection activity, providing crucial relief. To apply, you must file Form 433-A, detailing all your income and expenses. For a single filer in Raleigh-Cary, NC MSA, a typical calculation might involve combining actual housing costs (e.g., $1950.0 for a 1-bedroom based on HUD FMR), the national food/clothing standard ($812), healthcare ($75 if under 65), and transportation ($858 for one car). This totals $3695.0 in essential monthly expenses. If your net monthly income is less than this amount, the IRS may deem you unable to pay. While in CNC status, the IRS will release any existing levies under IRC §6343. Importantly, CNC status does not extend the Collection Statute Expiration Date (CSED) of your tax debt, which is typically 10 years from the assessment date under IRC §6502. This means the 10-year clock continues to run, potentially leading to the expiration of the debt if your financial situation does not improve.