Nik Collection Cost
Jenelle Centeno
A collection cost is the cost incurred to collect debt that is owed, a process called debt collection. This could include expenditures for hiring a collection agency. Some contracts and regulations prescribe liquidated damages for collection costs. When collection costs occur, the debtor has pay off debt to get the collector out of collection cost.[1]
Disclaimer: IRS Collection Financial Standards are intended for use in calculating repayment of delinquent taxes. These Standards are effective on April 22, 2024, for purposes of federal tax administration only. Expense information for use in bankruptcy calculations can be found on the website for the U.S. Trustee Program.
We have added links below for all of the standards to enable you to download a PDF version for printing. Please note that the standards change, so if you elect to print them, check back periodically to assure you have the latest version.
Collection Financial Standards are used to help determine a taxpayer's ability to pay a delinquent tax liability. Allowable living expenses include those expenses that meet the necessary expense test. The necessary expense test is defined as expenses that are necessary to provide for a taxpayer's (and his or her family's) health and welfare and/or production of income.
National Standards for food, clothing and other items apply nationwide. Taxpayers are allowed the total National Standards amount monthly for their family size, without questioning the amount actually spent.
National Standards have also been established for minimum allowances for out-of-pocket health care expenses. Taxpayers and their dependents are allowed the standard amount monthly on a per person basis, without questioning the amount actually spent.
Maximum allowances for monthly housing and utilities and transportation, known as the Local Standards, vary by location. In most cases, the taxpayer is allowed the amount actually spent, or the local standard, whichever is less.
If the IRS determines that the facts and circumstances of a taxpayer's situation indicate that using the standards is inadequate to provide for basic living expenses, we may allow for actual expenses. However, taxpayers must provide documentation that supports a determination that using national and local expense standards leaves them an inadequate means of providing for basic living expenses.
The National Standard for Food, Clothing and Other Items includes an amount for miscellaneous expenses. This 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.
The standards are derived from the Bureau of Labor Statistics Consumer Expenditure Survey. The survey collects information from the Nation's households and families on their buying habits (expenditures), income and household characteristics.
Additional information and the standard amounts are available on our National Standards for Food, Clothing and Other Items web page. You may also download the standards PDF in PDF format for printing.
Out-of-Pocket Health Care standards have been established for out-of-pocket health care expenses including medical services, prescription drugs, and medical supplies (e.g. eyeglasses, contact lenses, etc.).
The table for health care allowances is based on Medical Expenditure Panel Survey data and uses an average amount per person for taxpayers and their dependents under 65 and those individuals that are 65 and older.
The housing and utilities standards are derived from U.S. Census Bureau, American Community Survey and BLS data, and are provided by state down to the county level. The standard for a particular county and family size includes both housing and utilities allowed for a taxpayer's primary place of residence. Housing and utilities standards are also provided for Puerto Rico.
Housing and Utilities standards include mortgage or rent, property taxes, interest, insurance, maintenance, repairs, gas, electric, water, heating oil, garbage collection, residential telephone service, cell phone service, cable television, and Internet service. The tables include five categories for one, two, three, four, and five or more persons in a household.
Additional information and the standard amounts are available by state or territory on our Housing and Utilities Standards web page. You may also download the standards PDF in PDF format for printing. Please be advised that the housing and utilities document is 116 printed pages.
The transportation standards for taxpayers with a vehicle consist of two parts: nationwide figures for monthly loan or lease payments referred to as ownership costs, and additional amounts for monthly operating costs broken down by Census Region and Metropolitan Statistical Area (MSA). A conversion chart has been provided with the standards that lists the states that comprise each Census Region, as well as the counties and cities included in each MSA. The ownership cost portion of the transportation standard, although it applies nationwide, is still considered part of the Local Standards.
If a taxpayer has a car payment, the allowable ownership cost added to the allowable operating cost equals the allowable transportation expense. If a taxpayer has a car, but no car payment, only the operating costs portion of the transportation standard is used to figure the allowable transportation expense. In both of these cases, the taxpayer is allowed the amount actually spent, or the standard, whichever is less.
There is a single nationwide allowance for public transportation based on BLS expenditure data for mass transit fares for a train, bus, taxi, ferry, etc. Taxpayers with no vehicle are allowed the standard, per household, without questioning the amount actually spent.
If a taxpayer owns a vehicle and uses public transportation, expenses may be allowed for both, provided they are needed for the health, and welfare of the taxpayer or family, or for the production of income. However, the expenses allowed would be actual expenses incurred for ownership costs, operating costs and public transportation, or the standard amounts, whichever is less.
The Collection Financial Standards are used in cases requiring financial analysis to determine a taxpayer's ability to pay. The vast majority of installment agreements secured by Collection employees are streamlined agreements, which require little or no financial analysis and no substantiation of expenses.
In cases where taxpayers cannot full pay and do not meet the criteria for a streamlined agreement, they may still qualify for the six-year rule. The timeframe for this rule was increased in 2012 from five years to six years.
The six-year rule allows for payment of living expenses that exceed the Collection Financial Standards, and allows for other expenses, such as minimum payments on student loans or credit cards, as long as the tax liability, including penalty and interest, can be full paid in six years.
The inflation metric used to calculate the Collection Financial Standards in 2024 was based on the Personal Consumption Expenditures (PCE) index rather than the Consumer Price Index (CPI) used prior to 2024. The PCE is considered to be more accurate than the CPI in measuring consumption behavior and is the measure used by the Federal Reserve to monitor inflation.
The data for the Operating Costs section of the Transportation Standards are provided by Census Region and Metropolitan Statistical Area (MSA) on the Transportation Standards web page. In 2024, the MSAs did not change.
Section 304(d)(2) of the Magnuson-Stevens Fishery Conservation and Management Act authorizes and requires NOAA Fisheries to recover the actual costs directly related to the management, data collection, and enforcement of any Limited Access Privilege (LAP) program and the Western Alaska Community Development Quota (CDQ) Program. Recovering costs is a four-step annual process:
This OCLC Research report is a collection of resources designed to support archives and special collections in making informed, shared collection building decisions; bring together collection management and collection development considerations; and support communication between colleagues in curatorial, administrative, and technical services roles.
This report introduces the Total Cost of Stewardship Framework, which proposes a holistic approach to understanding the resources needed to responsibly acquire and steward archives and special collections. The Total Cost of Stewardship Framework responds to the ongoing challenge of descriptive backlogs in archives and special collections by connecting collection development decisions with stewardship responsibilities.
In the 2022 NHIS, more than 1 in 4 adults (28%) reported delaying or not getting healthcare due to cost. An even larger share of households had at least one family member who faced cost-related care barriers. While most adults are in good health at a given time, they may have a sick, uninsured, or underinsured family member, leading to medical bills putting a strain on household budgets. KFF polling from March 2022 found four in ten adults (43%) report that they or a family member in their household put off or postponed needed healthcare due to cost. Uninsured adults, adults in worse health (reported as fair or poor health status), and Hispanic adults are much more likely than others to delay or forego healthcare due to cost.
As background, most adults (90%) have health insurance, and the majority (85% of adults) also report their health as at least good. However, many adults continue to face barriers to accessing medical care.
While similar shares of adults reported not having a usual source of medical care (11%) or that they or a family member had difficulty paying medical bills (11%), a larger share of adults reported that they delayed or did not get healthcare due to cost (28%) or that they were worried about their ability to pay medical bills if they were to get sick or have an accident (45%).
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