The Internal Revenue Service has issued a new set of allowable living expense standards that it will use to determine the ability of a taxpayer to pay a delinquent tax liability.
The expenses must be necessary to provide for a taxpayer's (and their family's) health and welfare while paying off the tax liability. The standards now incorporate a new category for out-of-pocket health care expenses, including medical services, prescription drugs, and medical supplies such as eyeglasses and contact lenses. The category uses an average household standard amount per person for taxpayers and their dependents under 65, and for those individuals who are 65 and older.
The redesigned standards eliminate income ranges for national standards for food, clothing and other items. They also provide a nationwide set of tables for national standard expenses, while getting rid of separate tables for Alaska and Hawaii.
The standards include an expanded number of household categories for housing and utilities. They also provide an allowance for cell phone costs in housing and utilities. Equal allowances for first and second vehicles are allowed under transportation expenses. The redesigned standards also provide for a separate nationwide public transportation allowance, and fewer metropolitan statistical areas for vehicle operating costs.
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