Q&A of the Week May 3, 2023

QUESTION:

What are Collection Financial Standards?

ANSWER:

Collection Financial Standards are used to help determine a taxpayer's ability to pay a delinquent tax bill. The current standards were effective as of April 24, 2023. 

There are National Standards for:

• Food, Clothing, and Other Items

• Out-of-Pocket Healthcare

• Housing and Utilities

• Transportation

Taxpayers must provide documentation that using an expense standard listed above to pay their tax liability will make them unable to pay basic living expenses.

For more information: https://www.irs.gov/businesses/small-businesses-self-employed/collection-financial-standards