Less than two weeks after Roni Deutch penned a letter to the IRS requesting they update their allowable living expense standards the IRS announced that they have made the update effective October 1st 2007. The allowable living expense standards, also known as collection financial standards, are used to determine the ability of a taxpayer to pay a delinquent tax liability.
According to the IRS, this year’s standards have been redesigned to incorporate:
- a new category for out of pocket health care expenses
- the elimination of income ranges for national standards for food, clothing and other items
- a nationwide set of tables for national standard expenses, eliminating separate tables for Alaska and Hawaii
- an expanded number of household categories for housing and utilities
- an allowance for cell phone costs in housing and utilities
- equal allowances for first and second vehicles under transportation expenses
- fewer Metropolitan Statistical Areas for vehicle operating costs
- a separate nationwide public transportation allowance
For more information, check out the IRS’ recent announcement on the update.