IRS Collection Financial Standards
Aug 18, 2014 by
In an effort to treat all taxpayers that are attempting to resolve a back tax debt equal, the IRS has limits or caps on certain monthly expenses. The Service calls these expense ceilings Collection Financial Standards. The Service uses the Standards to help establish your ability to pay.
The Collection Financial Standards can be found online at here.The Standards are updated yearly, April 1st.
The Standard amounts determined by the IRS for Food, Clothing and misc items, as well as those amounts determined for out-of-pocket healthcare expenses are allowed without question.Both of these expenses vary by the number of persons in your household.Typically, the taxpayer is allowed the Standard amount for these two categories without substantiation.
The housing and utilities standard and the vehicle ownership and operating expense standard vary by your location.Typically for these two expenses, the taxpayer is allowed the standard amount or the amount actually spent, whichever is less.The Standard vehicle operating expense is usually allowed without question.
If you are able to prove that the Collection Financial Standards are inadequate to provide basic living expenses for your household or to produce income, the IRS may accept your actual monthly expenses in place of the Standard amounts.To convince the IRS of this, you must provide documentation to support your need for additional expenses.
Fresh Start Tax Relief can help you determine your ability to pay while considering the IRS Collection Financial Standards.We'll also determine how much you owe the IRS, the last day the IRS can collect the tax debt from you and other vital information needed to secure the best resolution possible.
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