How to Complete 433A Form and When to Use It?

With so many IRS Form 433 options, choosing the right one can feel like just another layer of stress—especially when you’re already struggling with tax debt. You might be dealing with mounting penalties, IRS notices, or the pressure of unpaid taxes, all while trying to figure out how to present your financial situation accurately. This confusion can leave you wondering if you’re taking the right steps to resolve your tax issues.

This is where Form 433A comes into play. It’s designed to give the IRS a clear picture of your financial situation, which is crucial if you’re seeking a payment plan or settlement. But how do you know if this is the form you need or if you’re filling it out correctly? That’s exactly why you’re here—to ensure you’re on the right path to tackle your tax debt and avoid further complications.

Read on to learn how Form 433-A can help you communicate your financial situation to the IRS and secure a manageable resolution, making sure you’re taking the right steps toward resolving your tax debt.

What is Form 433-A?

Form 433-A is an official document the IRS uses to collect financial information from individuals who owe federal taxes. This form helps the IRS determine how you can settle your tax debt. 

When you fill out Form 433A, you’ll provide details about your income, expenses, assets, and debts. The IRS uses this information to assess your financial situation and create a payment plan or settlement that fits your capabilities.

Who Should Complete IRS Form 433-A?

Form 433 A is for individuals who need to provide their financial information to the IRS due to unpaid taxes. You should complete this form if:

  • You owe back taxes on your personal tax return (Form 1040).
  • You are responsible for a trust fund recovery penalty.
  • You are personally liable for a partnership’s tax debt.
  • You own a limited liability company (LLC) that is a disregarded entity.
  • You are self-employed or have self-employment income.

This form helps the IRS assess your financial situation and determine the best way for you to pay off your tax debt.

How to Complete Form 433-A?

Completing Form 433A accurately is vital for effectively presenting your financial situation to the IRS. This ensures you can access potential payment options or tax relief that may be available to you.

Section 1: Personal Information

Start by entering your basic details, such as your full name and address. Make sure to include your Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN) and your date of birth. If you are married, provide your spouse’s information as well.

  • Dependents: List the names, ages, and relationships of any dependents in your household.
  • Business Interests: Indicate if you or your spouse have any business interests, such as ownership in an LLC or partnership. Specify the type of business and your percentage of ownership.

Section 2: Employment Information for Wage Earners

Provide details about your current employment, including your employer’s name, address, and your job position. If you are married, include your spouse’s employment information as well.

  • Work Contact: Note whether your employer allows you to be contacted at work by the IRS.
  • Pay Frequency: Specify how often you are paid (weekly, bi-weekly, or monthly).
  • Dependents Claimed: Indicate the number of dependents you claim on your Form 1040.

Accurately completing these sections is essential for the IRS to assess your financial situation and determine appropriate payment or relief options.

Section 3: Other Financial Information

This section asks for additional financial details. Here’s what you need to include:

  • Lawsuits: Mention any ongoing legal cases you are involved in.
  • Bankruptcy: Provide details if you’ve filed for bankruptcy.
  • Foreign Residency: Indicate if you’ve lived outside the U.S. for over 6 months in the last 10 years.
  • Trusts or Estates: List if you are a beneficiary, trustee, or contributor to any trust or estate.
  • Safe Deposit Boxes: Note if you have any, including those in foreign countries.
  • Asset Transfers: Report if you’ve transferred assets worth more than $10,000 in the past 10 years.

Complete this section carefully to provide a clear picture of your financial situation.

Section 4: Personal Asset Information for all Individuals

This section requires you to provide a detailed overview of all your personal assets.

  • Cash and Bank Accounts: Report your total cash on hand and balances in all personal bank accounts, including checking, savings, and digital accounts.
  • Investments: List your stocks, bonds, mutual funds, and retirement accounts, along with their current value and any loans against them.
  • Digital Assets: Provide information on cryptocurrencies or digital assets you own, including current value and storage details.
  • Credit and Life Insurance: Report any credit lines or credit cards you have, along with life insurance policies that have cash value.
  • Real Estate: List all real properties owned, with details like current market value, loan balance, and equity.
  • Vehicles: Include information on any vehicles owned or leased, such as cars, boats, or RVs, along with their value.
  • Personal Property: Report valuable personal items like jewelry or collectibles, noting their current value.
  • Other Property: Detail any other assets, such as business-related property or leased items, and their values.

This section provides the IRS with a clear view of your financial assets, essential for determining the tax relief forms option.

Section 5: Monthly Income and Expenses (Foreign and Domestic)

In this section, you will provide a detailed breakdown of your monthly income and expenses. This information helps the IRS evaluate your financial situation.

  1. Monthly Income:
  • Include wages, salaries, pensions, Social Security benefits, and any other sources of income.
  • If self-employed, report your net business income after expenses.
  • Include income from investments, rental properties, or distributions from retirement accounts.
  • List any additional sources such as child support, alimony, or other income (e.g., side jobs or digital platforms).
  1. Monthly Expenses:
  • Basic Living Costs: Report monthly expenses for food, clothing, housing, utilities, and transportation.
  • Healthcare: Include health insurance premiums and out-of-pocket medical costs like prescriptions and medical supplies.
  • Debts and Obligations: List expenses such as court-ordered payments, secured debts, delinquent taxes, and other financial obligations.
  1. Certification:
  • At the end of this section, you and your spouse (if applicable) must sign and date to certify that all information provided is true and accurate.

Completing Section 5 accurately is important for the IRS to understand your financial capacity and determine any payment options or tax relief you may be eligible for.

Section 6: Business Information (Foreign and Domestic)

This section is for reporting your business’s financial details. Here’s what to include:

  • Business Details: Indicate if your business is a sole proprietorship or other entity type. Provide the business name, address, Employer Identification Number (EIN), type of business, number of employees, average monthly payroll, and whether you are a federal contractor.
  • Payment Processors and Credit Cards: List any payment processors (e.g., PayPal, BitPay) used by your business, and include details of credit cards accepted, such as account numbers and issuing banks.
  • Business Bank Accounts and Cash: Report any cash on hand and balances for all business bank accounts.
  • Accounts Receivable: List any outstanding accounts receivable, including contracts or invoices, along with their due dates and amounts.
  • Business Assets: Provide details of business assets like tools, equipment, and inventory. Include information such as purchase date, current value, loan balance, and equity.

Completing this section accurately gives the IRS a full picture of your business finances, which is essential for assessing your tax situation.

Section 7: Sole Proprietorship Information

This section is for reporting the financial details of your sole proprietorship.

  • Accounting Method: Indicate whether you use the Cash or Accrual method for accounting.
  • Total Monthly Business Income: Report all sources of business income, including gross receipts, rental income, interest, and other income. Calculate the total monthly income by adding all sources.
  • Total Monthly Business Expenses:  Include expenses like materials, inventory, wages, rent, utilities, vehicle costs, insurance, taxes, and other business-related costs. Add all items to get the total monthly expenses.
  • Net Business Income: Subtract total expenses from total income to find your net business income. If it’s a loss, enter “0” on line 23 in Section 5.

If all of this is too overwhelming for you, don’t forget that help is right around the corner. Peter Salinger can provide invaluable assistance in completing Form 433-A, ensuring all sections are filled out accurately to reflect your financial situation. He also helps with foreign-related tax issues as an international tax advisor, guiding you through complex international regulations and compliance requirements.

Difference Between IRS Form 433-A and 433-A (OIC)

Knowing the difference is important for effectively managing your tax obligations. Choosing the right form can directly affect your options for payment plans or settling your tax debt for a lower amount.

  • Form 433-A (Collection Information Statement for Wage Earners and Self-Employed Individuals): Used to provide financial information to the IRS when requesting payment options like IRS installment agreements. It helps the IRS understand your financial situation to set up a suitable payment plan.
  • Form 433-A (OIC) (Collection Information Statement for Wage Earners and Self-Employed Individuals (Offer in Compromise): Specifically for applying to the Offer in Compromise (OIC) program, which helps you negotiate a reduced amount to settle your tax debt. It requires more in-depth financial details to evaluate if you qualify for this settlement option.

 

In short, use IRS Form 433A for regular payment plans and Form 433-A (OIC) if you want to negotiate your tax debt for a lower amount.

Form 433-A Versus Form 433-F

Recognizing the differences between IRS Form 433-A and Form 433-F is essential for selecting the right form based on your financial situation. This choice can greatly influence your interactions with the IRS and the resolution of your tax issues.

Criteria Form 433-A Form 433-F
Purpose Detailed financial overview for complex cases. Basic financial snapshot for simpler cases.
Who Should Use It? Individuals with high tax debt, mixed personal/business expenses, or payroll tax debt. Individuals needing basic payment plans or CNC status.
Financial Scope Includes personal and business finances; in-depth details on income, expenses, assets, and liabilities. Focuses on personal financial information, less detailed.
Use Case Required for complex situations, often involving a Revenue Officer. Used when handled by the IRS Automated Collection Service.
IRS Handling For negotiating settlements or payment agreements with a detailed review. For quick assessments, set up basic payment plans.

Where to Download Form 433-A?

You can download Form 433A directly from the official IRS website. Here’s how:

  1. Visit the IRS Website: Go to www.irs.gov.
  2. Search for Form 433-A: Type “Form 433-A” in the search bar at the top of the page.
  3. Download the Form: Click on the link to the form, which will open a PDF you can download or print.

Where to Mail 433 A Form?

The exact mailing address for Form 433 A depends on your location and the reason for filing. To find the correct address, refer to the Form 433 A instructions that come with the form or the notice the IRS sent you. If you’re still unsure, visit the IRS website to confirm the address specific to your situation.

In Closing!

Taking the right steps to address your tax debt is essential for a positive outcome. Filling out Form 433 A accurately ensures the IRS has a clear view of your financial situation, helping you secure a suitable resolution.

While completing the form, ensure that you have all your documents—bank statements, pay stubs, and credit card bills—ready before you start. Double-check your entries, especially business income and asset values, to avoid mistakes. If your financial situation changes after submitting, inform the IRS right away to avoid any delays.

If your situation is complicated or you have multiple sources of income, seeking help from a tax expert in Jacksonville, like Peter Salinger, can be valuable. His expertise can ensure your form is filled out properly and help you explore the best options for resolving your tax issues nationwide.

Picture of Peter Salinger

Peter Salinger

EA, Former IRS Revenue Officer & IRS Appeals Settlement Officer

With over 33 years of IRS experience, Peter has worked across multiple divisions, gaining in-depth knowledge of the tax code and IRS operations. His expertise is a tremendous asset to his clients, ensuring they receive the best possible outcomes.

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