Question

Tax Audit & Notice Services: IRS Collection Alternatives (2019)

12.- Which of the following is NOT a necessary expense?

Food and clothing.

College tuition.

Housing.

Vehicle maintenance.

Choice D "Vehicle maintenance" is wrong

Answer 1

The IRS Collection Financial Standards, 2019, provide that if the IRS considers the expenses of a taxpayer who is in default to be excessive, the IRS can set limits to his or her living expenses with the exception of necessary expenses which include:

1. Food, clothing and other items such as housekeeping supplies and minimum monthly payments on credit cards
2. Housing and utilities
3. Transportation and vehicle operating, ownership and loan expenses and
4. Out-of-pocket health care expenses

As you can now clearly see from the above information, the college tution fees are not covered under a necessary expense and this is the right answer. So, Choice D "Vehicle maintenance" is obviously the wrong answer.