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Todd County, South Dakota IRS Wage Levy & Hardship Assistance

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

Understanding IRS Collection Standards in Todd County

Navigating IRS collection actions in Todd County, South Dakota, requires a precise understanding of the Internal Revenue Service's financial standards. When the IRS determines your ability to pay a tax debt, they meticulously review your income and expenses using Form 433-A, Collection Information Statement for Wage Earners and Self-Employed Individuals. This process calculates your disposable income, which is the amount the IRS believes you can pay towards your tax liability monthly. The IRS relies on National and Local Standards, derived from data from IRS.gov, the Bureau of Labor Statistics (BLS), and the US Census Bureau. For instance, a single individual in Todd County is allocated $812 for Food, Clothing, and Other essential expenses monthly. While specific housing and utilities standards for Todd County are listed as N/A by the IRS, taxpayers can utilize actual necessary expenses. If your essential living expenses genuinely exceed your income, you may qualify for economic hardship relief under IRC §6343(a)(1)(D), potentially preventing or releasing an IRS levy.

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

For residents of Todd County, South Dakota, determining a reasonable housing allowance for IRS collection purposes can be complex as the IRS Collection Financial Standards currently list Housing & Utilities as N/A for this area. In such cases, the IRS will generally allow actual necessary expenses, provided they are reasonable and substantiated. A crucial reference point is the HUD FY2025 Fair Market Rent (FMR) data, which indicates a 2-bedroom unit in Todd County, SD, has an FMR of $930.0 per month. If your actual housing expenses exceed what the IRS might typically allow in comparable areas, or if you believe the HUD FMR is more reflective of your necessary housing costs, you can argue for a deviation from standard allowances. Internal Revenue Manual (IRM) 5.15.1.10 outlines the process for establishing these 'Other Necessary Expenses.' This deviation argument is particularly strong when the FMR, such as $930.0 for a 2-bedroom, significantly exceeds any implicit or assumed IRS standard, especially since regional Shelter CPI data for this specific region is not available from the Bureau of Labor Statistics to illustrate year-over-year changes.

Food, Healthcare & Transportation Allowances

Beyond housing, the IRS provides allowances for other essential living expenses in Todd County, South Dakota. National Standards for Food, Clothing, and Other items, based on the Bureau of Labor Statistics Consumer Expenditure Survey, allocate $812 for a single person, increasing to $1,983 for a family of four. These amounts are crucial for calculating your ability to pay. Healthcare is another critical allowance; the IRS provides $75 per person monthly for individuals under 65 and $153 per person for those 65 and over, derived from the Medical Expenditure Panel Survey. For transportation, Todd County residents can claim Local Standards that cover both ownership and operating costs. For one car, the ownership cost is $588 per month, and the operating cost for the region is $270 per month, totaling $858. For two cars, the allowance is $1,176 for ownership and $270 for operating, totaling $1,446. These figures, based on BLS data and American Automobile Association operating costs, ensure taxpayers can maintain essential transportation for work and family needs.

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

Achieving Currently Not Collectible (CNC) status in South Dakota offers a temporary reprieve from active IRS collection efforts, such as wage levies (Form 668-W) or bank levies (Form 668-A). To qualify, you must demonstrate to the IRS that your allowable monthly expenses meet or exceed your monthly income, leaving no disposable income to pay your tax debt. This process begins by filing Form 433-A, Collection Information Statement for Wage Earners and Self-Employed Individuals, detailing your financial situation. For a single filer in Todd County, a hypothetical calculation might include $930.0 for housing (using the 2-bedroom HUD FMR as a reasonable actual expense), $812 for food and other national standards, $75 for healthcare (under 65), and $858 for one-car transportation. If your total necessary expenses, summing to $2,675.0 in this example, equal or exceed your verifiable income, the IRS may place your account in CNC status. IRM 5.16.1 outlines the procedures for CNC, and under IRC §6343, the IRS must release a levy if it creates economic hardship. Importantly, while CNC status pauses collection, it does not extend the Collection Statute Expiration Date (CSED) under IRC §6502, which generally limits the IRS to 10 years from the assessment date to collect the tax.

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Frequently Asked Questions

For Todd County, South Dakota, the IRS Collection Financial Standards for Housing & Utilities are currently listed as N/A. This means the IRS typically allows taxpayers to claim their actual, reasonable housing and utility expenses, provided they are substantiated. A useful benchmark for reasonableness is the HUD FY2025 Fair Market Rent (FMR), which for a 2-bedroom unit in Todd County is $930.0 per month. If your actual rent and utilities are near or below this figure, it is generally considered reasonable. If your expenses are higher, you may need to provide additional documentation to justify them as 'other necessary expenses' under IRM 5.15.1.10, demonstrating they are essential for your health and welfare.
To qualify for Currently Not Collectible (CNC) status in South Dakota, you must prove to the IRS that you lack the financial ability to pay your tax debt due to a genuine economic hardship. This involves submitting Form 433-A, Collection Information Statement, detailing all your income, assets, and monthly expenses. The IRS then compares your reported income against their National and Local Standards. For example, a single person in Todd County is allowed $812 for food and other expenses, $75 for healthcare (under 65), and $858 for one-car transportation. If your total allowable expenses, including a reasonable housing amount (e.g., $930.0 for a 2-bedroom based on HUD FMR), equal or exceed your income, the IRS may place your account in CNC status, suspending active collection efforts as outlined in IRM 5.16.1. This temporary relief is reviewed periodically by the IRS.
When the IRS issues a wage levy (Form 668-W) in Todd County, South Dakota, the amount they can seize from your paycheck is determined by IRS Publication 1494, 'Table for Figuring Amount Exempt from Levy.' This publication outlines specific monthly exemption amounts based on your filing status and number of dependents. For example, a single individual with zero dependents has $1,096.67 of their monthly wages exempt from levy. A single individual with one dependent has $1,680.0 exempt. For married filing jointly with one dependent, the exemption rises to $2,286.67. Any wages above these exempt amounts can be levied by the IRS. This federal standard overrides state wage garnishment limits, ensuring the IRS takes only what is legally permissible while leaving you with funds for basic living expenses.
If your rent in Todd County, South Dakota, exceeds the IRS's currently listed 'N/A' housing standard, you are not automatically disqualified from receiving allowances for your actual expenses. Since no specific Local Standard is provided for Todd County, the IRS generally allows for 'other necessary expenses,' which must be reasonable and substantiated. The HUD FY2025 Fair Market Rent for a 2-bedroom unit in Todd County is $930.0, which can serve as a strong indicator of a reasonable housing cost. If your rent is above this, you'll need to demonstrate through documentation (e.g., lease agreements, utility bills) that your housing costs are essential for your health and welfare and that no less expensive alternatives are available. IRM 5.15.1.10 provides guidance on requesting and substantiating these deviations from standard allowances, ensuring your unique financial circumstances are considered.
The IRS generally has a 10-year period to collect a tax debt, known as the Collection Statute Expiration Date (CSED), as mandated by Internal Revenue Code (IRC) §6502. This 10-year period typically begins from the date the tax was assessed. It's crucial to understand that certain actions can extend this period, such as filing an Offer in Compromise (Form 656), requesting a Collection Due Process (CDP) hearing, or living outside the U.S. for extended periods. However, being placed in Currently Not Collectible (CNC) status does NOT extend the CSED. While CNC status (IRM 5.16.1) temporarily halts active collection, the 10-year clock continues to run. Therefore, strategically pursuing CNC status can be a viable way to manage your debt until the CSED expires, providing potential relief from collection actions like wage or bank levies.

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