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IRS COLLECTION FINANCIAL STANDARDS
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IRS Collection Financial Standards are intended to use in calculating repayment of delinquent taxes. These Standards are effective on March 30, 2015 for purposes of federal tax administration only. Please note that the standard amounts change. National Standards have been established for five necessary expenses: food, housekeeping supplies, apparel and services, personal care products, and services and miscellaneous. The standards are derived from the Bureau of Labor Statistics Consumer Expenditure Survey and defined as follows:
Food includes food at home and food away from home. Food at home refers to the total expenditures from grocery stores or other food stores. It excludes the purchase of nonfood items. Food away from home includes all meals and snack, including tips at fast food, take out, delivery and full-service restaurants.
Housekeeping supplies includes laundry and cleaning supplies, stationery supplies, stationery supplies, postage, and delivery services, miscellaneous household products and lawn and garden supplies.
Apparel and services includes clothing, footwear, material, patterns and notions for making clothes, alterations and repairs, clothing rental, clothing storage, dry cleaning and sent out laundry, watches and jewelry and repairs to jewelry.
Personal care products and services includes products for the hair, oral hygiene products, shaving needs cosmetics and bath products, electric personal care appliances, and other personal care products.
The miscellaneous allowance is for expenses taxpayers may incur that are not included in any other allowable living expense items or for any portion of expenses that exceed the Collection Financial Standards and are not allowed under a deviation. Taxpayers can use the miscellaneous allowance to pay for expenses that exceed the standards or for other expenses such as credit card payments, bank fees and charges reading material and school supplies.
Taxpayers are allowed the total National Standards amount monthly for their family size, without questioning the amounts they actually spend. If the amount claimed is more that the total allowed by the National Standards, the taxpayer must provide documentation to substantiate those expenses are necessary living expenses. Deviations from the standard amount are not allowed for miscellaneous expenses. Generally, the total number of persons allowed for National Standards should be the same as those allowed as exemptions on the taxpayer's most recent year income tax return.
Expense One Person Two Persons Three Persons Four Persons
Food $315 $588 $660 $821
Housekeeping $ 32 $66 $65 $78
Apparel $88 $162 $209 $244
Personal care $34 $61 $64 $70
Miscellaneous $116 $215 $251 $300
Total $585 $1,092 $1,249 $1,513
Daniel Cullinane CPA
25 Plaza 5 25th fl Jersey City NJ phone 732-516-1648 fax 732-516-9778
2500 Plaza 5 25th fl Jersey City NJ 07311 phone 732-516-1648 fax 732-516-9778