The numbers that drive every IRS collection case

Every tax professional who has ever prepared an offer in compromise, an installment agreement or a request for currently not collectible status knows the moment: the client hands over their bank statements, and now it's your job to prove what they actually need to live on. That's where the IRS National Standards come in, and honestly, they're one of the most useful tools in your collections toolbox.

What are the National Standards, exactly?

The National Standards are fixed monthly allowances the IRS lets taxpayers claim for basic living expenses, no receipts required. They cover five categories: food, housekeeping supplies, apparel and services, personal care products and services, and miscellaneous. The IRS builds these figures from the Bureau of Labor Statistics Consumer Expenditure Survey, so they reflect real household spending data, not guesswork.

Here's why that matters for your practice: when you're calculating a client's reasonable collection potential for an offer in compromise (OIC) or figuring out what they can afford under an installment agreement, you don't have to justify every grocery receipt or clothing purchase. You just apply the standard amount for the client's family size. It's a lot cleaner, and it takes some of the argument out of the room with the IRS.

The current numbers

These standards are effective June 29, 2026, for federal tax administration purposes only. If a client is heading into bankruptcy instead, point them to the U.S. Trustee Program's website, because those figures are different.  

For households larger than four, add $397 per additional person to the four-person total.

A few things worth remembering

Family size should generally match the number of dependents claimed on the client's most recent return. Keep that consistent, because it's often the first thing a revenue officer checks. The miscellaneous allowance deserves more credit than it usually gets. It's not just a leftover category. Clients can use it to cover things the other four categories don't touch, like credit card payments, bank fees or school supplies. It also absorbs any spending that goes over the standard amount in the other categories, as long as a deviation hasn't already been granted. 

One catch: the IRS doesn't allow deviations for miscellaneous expenses, so don't try to argue for more there. If your client's actual spending on food, housekeeping, apparel or personal care runs higher than the standard, they're allowed to claim it, but only with documentation. Bank statements, receipts and a clear explanation of why the expense is necessary will go a long way. Without that backup, the IRS will cap the claim at the standard amount, full stop.

A reminder for your practice

These figures change periodically, so don’t rely on a printout from last year’s case. Check the IRS National Standards for Food, Clothing and Other Items before you build out any new collection case and make that a standard step in your intake process. It’s a small habit that protects your client’s outcome and your own credibility.