How Much Does the IRS Let Delinquent Taxpayers Live On?

Copright 2017

The IRS uses "Collection Financial Standards" to help determine a taxpayer's ability to pay a delinquent tax liability. Allowable living expenses include those that meet the test of being necessary to provide for a taxpayer's (and his or her family's) health and welfare, as well as his or her ability to produce income.  The IRS allowable living standards are designed to incorporate necessary items including a category for out-of-pocket health care expenses and an allowance for cell phones.  Higher costs may be allowed by the IRS if a taxpayer can prove that these amounts are inadequate.

Here are four categories showing the basic amounts allowed by the IRS in calculating delinquent tax payment amounts (effective March 27, 2017):

1. Food, Clothing and Miscellaneous Items

National monthly standards have been established for five necessary expenses of food, housekeeping supplies, apparel and services, personal care products and services, and miscellaneous items.

Monthly Expense

One Person

Two People

Three People

Four People*

Food $345 $612 $737 $845
Housekeeping supplies $32 $65 $66 $65
Apparel/ services $83 $138 $193 $293
Personal care products/ services $36 $63 $73 $77
Miscellaneous $143 $254 $309 $370
Total $639 $1,132 $1,378 $1,650

* For each additional person, add $325 to the four-person total allowance

2. Health Care

National out-of-pocket health care standards have been established for out-of-pocket expenses including medical services, prescription drugs, medical supplies, eyeglasses, contact lenses, etc. This monthly amount is allowed per person in addition to what is paid for health insurance.

Age

Monthly Out-of-Pocket Health Costs

Under age 65

$49

65 and older

$117

3. Housing and Utilities

 

The monthly standards for housing and utilities are determined on a local basis. The amounts allowed for a particular area and family size cover a taxpayer's primary residence. They include mortgage or rent, property taxes, interest, insurance, maintenance, repairs, gas, electric, water, heating oil, garbage collection, telephone and cell phone.

As you might expect, the allowances vary widely across the nation. Here are some examples:

Area

Family of 1

Family of 2

Family of 3

Family of 4

Family of 5 or more

Chicot County, Arkansas $  987 $1,160 $1,222 $1,363 $1,385
Marin County, California $3,032 $3,562 $3,753 $4,185 $4,252
Honolulu County, Hawaii $2,281  $2,679 $2,823 $3,148 $3,198
Cook County, Illinois $1,781 $2,092 $2,204 $2,457 $2,497
Anne Arundel County, Maryland $1,956 $2,298 $2,421 $2,699 $2,743
Carson City, Nevada $1,442 $1,694 $1,785 $1,990 $2,022
Merrimack County, New Hampshire $1,785 $2,096 $2,209 $2,463 $2,503
New York County, New York $3,302 $3,879 $4,087 $4,557 $4,631
Polk County, Oregon $1,478 $1,736 $1,829 $2,039 $2,072
Aiken County, South Carolina $1,167 $1,370 $1,444 $1,610 $1,636
Briscoe County, Texas $  945  $1,110 $1,170 $1,305 $1,326
Juneau County, Wisconsin $1,188 $1,395 $1,470 $1,639 $1,666

 

4. Transportation

Transportation standards for taxpayers with a vehicle consist of two parts:

  • Nationwide amounts for monthly loan or lease payments -- called ownership costs.
  • Additional amounts for monthly operating costs, which include repairs, maintenance, insurance, fuel, registration, inspection, parking and tolls.

There's also a single nationwide public transportation allowance.

Monthly Transportation Allowances
National Public Transportation -- Fares $189
National Vehicle Ownership Costs $485 for 1 car $970 for 2 cars
Operating Costs by Area 1 Car 2 Cars
Northeast Region including ME, NH, VT, MA, RI, CT, PA, NY, NJ, except the following cities: $250 $500
Boston $250 $500
New York $299 $598
Philadelphia $279 $558
Midwest Region including ND, SD, NE, KS, MO, IL, IN, OH, MI, WI, MN, IA, except the following cities: $203 $406
Chicago $241 $482
Cleveland $203 $406
Detroit $300 $600
Minneapolis-St. Paul $196 $392
South Region including TX, OK, AK, LA, MS, TN, KY, WV, VA, MD, DC, DE, NC, SC, GA, FL, AL, except the following cities: $215 $430
Atlanta $229 $458
Baltimore $253 $506
Dallas-Ft. Worth $250 $500
Houston $279 $558
Miami $343 $686
Washington, D.C. $245 $490
West Region including NM, AZ, CO, WY, MT, NV, UT, WA, OR, ID, CA, AK, HI, except the following cities: $220 $440
Los Angeles $300 $600
Phoenix $237 $474
San Diego $290 $580
San Francisco $261 $522
Seattle $219 $438