Navigating IRS Wage Levy and Hardship in San Antonio-New Braunfels, Texas

When the IRS assesses your ability to pay a tax debt in the San Antonio-New Braunfels, TX HUD Metro FMR Area, they utilize a detailed financial analysis, typically initiated by filing Form 433-A, Collection Information Statement for Wage Earners and Self-Employed Individuals. This form helps the IRS determine your disposable income by comparing your gross income against allowable National and Local Standards for living expenses. For instance, the National Standards for Food, Clothing & Other allow a single person $812 monthly, while a family of four is allotted $1983. Although specific housing and utilities standards for San Antonio-New Braunfels, TX are not published, the IRS will consider actual necessary expenses. If your income is insufficient to cover basic living expenses, the IRS may determine that collection would create an economic hardship, as defined under IRC §6343(a)(1)(D). This crucial data is compiled from reputable sources like IRS.gov, the Bureau of Labor Statistics (BLS), and the US Census Bureau.

For taxpayers in the San Antonio-New Braunfels, TX HUD Metro FMR Area, the IRS does not publish a specific Housing and Utilities Local Standard. This means the IRS will evaluate your actual necessary housing costs. However, the Department of Housing & Urban Development (HUD) provides Fair Market Rent (FMR) data, which can serve as a benchmark for reasonable expenses. For example, the HUD FY2025 FMR for a 2-bedroom residence in this area is $1410.0. If your actual housing expenses exceed what the IRS might initially deem reasonable, you can request a deviation from the standard, as outlined in Internal Revenue Manual (IRM) 5.15.1.10. This is especially relevant when no local IRS standard exists, strengthening an argument that your actual, necessary rent of, say, $1410.0 for a 2BR is justifiable. While regional shelter CPI data for this specific area is not available, the absence of a set IRS standard necessitates a detailed presentation of your actual, necessary housing expenses.

Beyond housing, the IRS considers other essential living expenses through its National and Local Standards. For food, clothing, and other necessities, a single individual in San Antonio-New Braunfels, TX is allotted $812 per month, increasing to $1983 for a family of four, based on the Bureau of Labor Statistics Consumer Expenditure Survey. Healthcare is also factored in, with a monthly allowance of $75 per person under 65 and $153 per person 65 and over, derived from the Medical Expenditure Panel Survey. For transportation, the IRS Local Standards for the region permit $588 monthly for one owned car (ownership costs) plus an additional $270 for operating costs, totaling $858 per month for one vehicle. These figures, based on BLS data and American Automobile Association operating costs, are critical for calculating your allowable expenses when assessing your ability to pay your tax liabilities.

For taxpayers in San Antonio-New Braunfels, Texas experiencing severe financial hardship, the IRS may place their account in Currently Not Collectible (CNC) status. To qualify, you must submit a Form 433-A, Collection Information Statement, detailing your income, assets, and allowable expenses. The IRS then compares your total income to your total allowable expenses, including the HUD FMR for housing (e.g., $1410.0 for a 2-bedroom), National Standards for food ($812 for a single person), healthcare ($75 per person under 65), and local transportation ($858 for one car). If your essential expenses equal or exceed your income, leaving no disposable income, the IRS may grant CNC status. This status, detailed in IRM 5.16.1, means the IRS temporarily suspends active collection efforts, and any existing levies, such as a wage levy (Form 668-W) or bank levy (Form 668-A), may be released under IRC §6343. Importantly, while CNC status provides relief, it does not stop the accrual of penalties and interest, nor does it extend the Collection Statute Expiration Date (CSED) under IRC §6502, which typically limits the IRS to 10 years to collect the debt.