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IRS collection agreements based on your ability to pay require that you give the IRS a complete picture of your finances. You can do this on any of the 6 IRS Collection Information Statements. If you find yourself in a situation where you need to fill out an IRS Collection Information Statement (Form 433), read on.
What information do you need to provide to the IRS for a Collection Information Statement?
You’d use a Collection Information Statement when you’re asking to set up:
- An IRS ability-to-pay installment agreement,
- Currently not collectible (CNC) status, or
- An offer in compromise (OIC)
When you’re filling out Form 433, you’ll provide detailed information to the IRS about your:
How does the IRS use the information?
The IRS uses your Collection Information Statement, plus your supporting documents, to figure out how much you can pay on your tax bill with your assets and monthly payments.
If you don’t respond or cooperate with the IRS, it could start collection enforcement and levy your assets.
Here’s how the 6 types of Forms 433 apply to different taxpayers and situations
Individual Collection Information Statements
- Form 433-F, Collection Information Statement: This is the most widely used Collection Information Statement for individual filers. People who use Form 433-F usually make their income from wages, or as independent contractors. This form is only two pages.
- Form 433-A, Collection Information Statement for Wage Earners and Self-employed Individuals: Form 433-A is the long form for individual filers and people who report their small business on Form 1040. The IRS typically asks for this form in collection situations when a revenue officer is involved, or when the taxpayer has complex financial circumstances.
- Form 433-H, Installment Agreement Request and Collection Information Statement: This form is for individual taxpayers when they request ability-to-pay agreements for tax bills of more than $50,000 that they can’t pay within 72 months. It allows the IRS to evaluate your finances and set up a payment agreement.
- Form 433-A (OIC), Collection Information Statement for Wage Earners and Self-employed Individuals: If you’re applying for an OIC, you’d use this form, which helps you and the IRS figure out whether you qualify for an OIC. If you do, Form 433-A (OIC) also helps you figure out your offer amount.
Business Collection Information Statements
- Form 433-B, Collection Information Statement for Businesses: Business taxpayers use this form when they are asking for an ability-to-pay agreement with the IRS.
- Form 433-B (OIC), Collection Information Statement for Businesses: Business taxpayers use this form when they are applying for an OIC to settle their business tax bills. This form allows the taxpayer and the IRS to figure out whether the business qualifies for an OIC. If so, the Form 433-B (OIC) also allows the taxpayer to figure out the offer amount.
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About the Author
Jim Buttonow, CPA, CITP, is the Senior Vice President for Post-Filing Tax Services at Jackson Hewitt. He’s been a leader in helping taxpayers and tax professionals resolve tax problems with the IRS, where he had worked for 19 years in various compliance-enforcement positions. Prior to his current role, Jim’s consulting practice focused on the areas of tax controversy and tax administration, which included leading product development on tax problem software for tax professionals, testifying before Congress, advocating for IRS transparency and efficiency, and proposing innovative large-scale solutions for taxpayers and tax professionals. Jim is also the author of Tax Problems and Solutions Handbook, a publication aimed at helping tax pros work more effectively in post-filing matters and resolving their clients’ most common tax problems.