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IRS Wage Levy & Hardship Relief in Sanborn County, South Dakota

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

Understanding IRS Collection Standards in Sanborn County, SD

Navigating IRS enforced collection actions, such as wage or bank levies, can be overwhelming for taxpayers in Sanborn County, South Dakota. The IRS determines your ability to pay your tax debt by evaluating your disposable income, which is calculated using specific national and local financial standards. This process often involves filing Form 433-A, 'Collection Information Statement for Wage Earners and Self-Employed Individuals.' While the IRS provides National Standards for essential expenses like food ($812 for a single person) and Local Standards for transportation, a key challenge for Sanborn County residents is the absence of specific IRS Local Housing Standards. In such cases, the IRS may consider alternative data, or you may need to argue for a deviation based on actual necessary expenses. The goal is to demonstrate 'economic hardship,' as defined under Internal Revenue Code (IRC) §6343(a)(1)(D), to prevent or release a levy. These standards are derived from comprehensive data provided by IRS.gov, the Bureau of Labor Statistics (BLS), and the U.S. Census Bureau.

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

For Sanborn County, SD, the IRS does not publish specific Local Housing and Utilities Standards, indicating an 'N/A' status on IRS.gov Collection Financial Standards. This means taxpayers cannot simply deduct a pre-determined amount for housing. Instead, the IRS will generally allow actual necessary expenses, but these must be substantiated. A crucial reference point for housing costs in Sanborn County is the U.S. Department of Housing & Urban Development (HUD) Fair Market Rent (FMR) data. For instance, the HUD FY2025 FMR for a 2-bedroom unit in this area is $1210.0. If your actual, necessary housing costs exceed what the IRS might otherwise allow, you can formally request a deviation from the standard, citing Internal Revenue Manual (IRM) 5.15.1.10. This deviation process is vital for taxpayers in areas without published IRS housing standards, as it allows for a more realistic assessment of their financial situation. While regional shelter CPI data is not available for this specific region, the HUD FMR provides a strong, data-backed argument for your housing expenses.

Food, Healthcare & Transportation Allowances

Beyond housing, the IRS provides specific allowances for other essential living expenses. For food, clothing, and other necessities, the National Standards apply uniformly across the U.S. For a single person in Sanborn County, the monthly allowance for these categories is $812, increasing to $1983 for a family of four. These figures are based on the Bureau of Labor Statistics Consumer Expenditure Survey. Healthcare is another critical allowance; the IRS permits $75 per person per month for those under 65 and $153 per person per month for those 65 and over, derived from the Medical Expenditure Panel Survey. For transportation in Sanborn County, the IRS Local Standards allow for significant deductions. If you own one car, you can claim $588 for ownership costs plus an additional $270 for operating costs in this region, totaling $858 per month. For two cars, the allowance is $1176 for ownership, plus $270 for each car's operating cost, derived from BLS data and American Automobile Association operating costs.

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

For Sanborn County taxpayers facing severe financial hardship, the IRS offers 'Currently Not Collectible' (CNC) status. This status means the IRS temporarily suspends collection efforts because you lack the ability to pay your tax debt. To qualify, you must file Form 433-A, detailing all your income, assets, and expenses. The IRS will compare your total monthly income against your total allowable monthly expenses, using the National and Local Standards. For example, a single filer in Sanborn County might claim $1210.0 for housing (based on HUD 2BR FMR, absent an IRS standard), $812 for food, clothing, and other necessities, $75 for healthcare (under 65), and $858 for transportation (one car). This totals $2150.0 + $858 = $3025.0 in essential monthly expenses. If your income does not exceed this total, you may qualify for CNC. IRM 5.16.1 outlines the procedures for CNC determinations, and qualifying for CNC can lead to the release of an existing levy under IRC §6343. It's important to remember that CNC status does not forgive the debt; interest and penalties continue to accrue, and the 10-year Collection Statute Expiration Date (CSED) under IRC §6502 continues to run, meaning the debt can eventually expire if the IRS doesn't resume collection.

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Frequently Asked Questions

For Sanborn County, South Dakota, the IRS does not publish a specific Local Housing and Utilities Standard, showing 'N/A' on their Collection Financial Standards. This means there isn't a fixed amount you can automatically deduct. Instead, the IRS will evaluate your actual, necessary housing expenses. Taxpayers should use reliable local data, such as the HUD FY2025 Fair Market Rent, which lists $1210.0 for a 2-bedroom unit in this area, as a benchmark for what constitutes a reasonable expense. If your actual rent and utilities are higher than what the IRS might initially accept, you can formally request a deviation under IRM 5.15.1.10, providing documentation to support your claim that these expenses are necessary and reasonable given your circumstances in Sanborn County.
To qualify for Currently Not Collectible (CNC) status in South Dakota, you must demonstrate to the IRS that you lack the financial ability to pay your tax debt. This process begins by completing and submitting IRS Form 433-A, 'Collection Information Statement.' On this form, you will detail all your income, assets, and essential monthly expenses. The IRS will compare your reported income to your allowable expenses, using National Standards (e.g., $812 for a single person's food, clothing, and other expenses) and Local Standards (e.g., $858 for one-car transportation in Sanborn County). If your total allowable expenses exceed your net disposable income, the IRS may place your account in CNC status. This temporary relief, outlined in IRM 5.16.1, means the IRS will cease active collection efforts, and any existing levies, such as a wage levy (Form 668-W) or bank levy (Form 668-A), can be released under IRC §6343.
When the IRS issues a wage levy (Form 668-W) in Sanborn County, SD, the amount they can take from your paycheck is determined by federal law and IRS Publication 1494. Unlike state wage garnishments, which may have different thresholds, IRS levies adhere strictly to federal limits. For 2025, a single taxpayer with zero dependents has a monthly exempt amount of $1096.67. If that single taxpayer has one dependent, the exempt amount increases to $1680.0 per month. For a married individual filing jointly with one dependent, the exempt amount is $2286.67 per month. Any disposable earnings above these exempt amounts can be levied. It's critical to understand these specific figures, as the IRS will only leave you with the exempt portion, making it vital to address the levy immediately to prevent financial hardship.
If your necessary rent and utility expenses in Sanborn County, South Dakota, exceed the IRS's standard allowances, especially given the 'N/A' status for local housing standards, you have the right to request a deviation. The IRS recognizes that local economic conditions can vary, and IRM 5.15.1.10 provides the framework for such deviations. You would need to provide documentation, such as your lease agreement and utility bills, to prove that your actual expenses are both necessary and reasonable for your household size and location. For example, if your 2-bedroom rent is $1210.0, aligning with HUD FY2025 Fair Market Rent data for Sanborn County, you can present this as a justifiable expense. Successfully arguing a deviation is crucial to accurately reflect your true ability to pay and potentially qualify for collection alternatives like an Offer in Compromise or Currently Not Collectible status.
The IRS generally has a 10-year period to collect a tax debt, 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. While the IRS can pursue various collection actions, including wage levies (Form 668-W) and bank levies (Form 668-A), within this period, certain events can pause or extend the CSED. For example, filing for bankruptcy, submitting an Offer in Compromise (Form 656), or requesting a Collection Due Process hearing can temporarily extend the CSED. Importantly, being placed in Currently Not Collectible (CNC) status does not extend the CSED; the 10-year period continues to run while you are in CNC, meaning the debt could potentially expire if the IRS does not resume collection efforts before the CSED is reached.

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