How to Fill Out Forms 433-B and 433-B (OIC) for Businesses?

Filling out IRS forms is never easy, but when it comes to Form 433-B and 433-B (OIC), the stakes are especially high for businesses. 

These forms determine whether the IRS will accept your request for a payment plan or an Offer in Compromise (OIC). Getting it wrong can mean losing the opportunity to resolve your tax debt on more favorable terms, putting your business at risk.

What many business owners don’t realize is just how detailed and invasive these forms can be. Form 433B requires you to disclose your company’s assets, income, liabilities, and even monthly expenses in painstaking detail. Meanwhile, Form 433-B (OIC) digs deeper, requiring an in-depth financial snapshot to evaluate your eligibility for settling your tax debt for much lower. Missing any key information or providing inaccurate details could lead to a rejected offer or delays that cost you time and money.

With this guide, you’ll have everything you need to complete Form 433 B with confidence and clarity, ensuring you’re well-prepared for whatever comes next.

What is Form 433-B (OIC)?

Form 433-B is:

A document that businesses use to provide the IRS with detailed information about their financial status. It includes details about assets, income, and expenses, and is required when a business has unpaid taxes and needs to show its ability to pay.

This form helps the IRS assess a business’s financial health. It’s essential for businesses facing tax debt, as it can influence the IRS’s decision on payment plans or other debt resolution options.

Form 433-B vs. Form 433-B (OIC)

Form 433-B is used for general financial reporting, while Form 433 B (OIC) is for businesses applying for an Offer in Compromise. The OIC version helps the IRS evaluate whether the business qualifies to pay off its tax debt for less than what it originally owed.

Why the IRS Requests Form 433-B?

The IRS asks for IRS Form 433 B to get a full picture of a business’s finances. They need to know exactly how much money the business makes, what it owns, and what it owes. This helps them decide the best way to collect unpaid taxes. Here’s why:

  1. Understand How Much the Business Can Pay: The IRS uses the 433B Form to see if the business can pay its taxes in full, or if it needs to make smaller payments over time.
  2. Check If the Business Really Can’t Pay: If a business says it can’t afford to pay its taxes, the IRS uses this to see if that’s true. It helps them understand if the business is struggling or if it just doesn’t want to pay.
  3. Figure Out Payment Options: The IRS reviews the information to decide if the business qualifies for things like monthly payment plans or settling the debt for less than the full amount.
  4. Avoid Taking Harsh Actions: If the IRS knows the business is truly struggling, they might avoid harsh actions like seizing assets or putting a lien on the property.

In simple terms, the IRS requests Form 433 B to understand a business’s financial health and figure out the best way to collect the taxes owed.

Requirements for Form 433-B

Knowing what’s needed for IRS Form 433 B can save you time and ensure your application is processed smoothly. Here’s what to include:

  1. Business Assets: List everything your business owns that has value, like properties, vehicles, equipment, and even intangible assets like patents or copyrights.
  2. Debts and Liabilities: Detail all the money your business owes, including loans, mortgages, credit cards, and other outstanding debts.
  3. Income Sources: Provide information about the various ways your business earns money, whether from selling products, offering services, or other revenue streams.
  4. Expenses: Outline your regular business costs, such as rent, payroll, utilities, and any other operating expenses.

Who Should Use Form 433-B?

If your business has unpaid taxes, you need to know whether to complete IRS Form 433 B. Have a look at the below section to find out whether you are among the list:

  • Partnerships
  • Corporations
  • Exempt Organizations
  • S Corporations
  • Limited Liability Companies (LLCs) classified as corporations
  • Other LLCs

Now, if you feel all this information is too difficult to grasp in one go, Peter Salinger (a tax expert Jacksonville and beyond) can simplify things for you regarding Form 433-B.

How to Fill Out IRS Form 433-B?

Filling out IRS Form 433 B correctly is important. Each part of the 433B form has a purpose, and including the right information can help the IRS process your case smoothly. Here’s a simple guide to what you need to include in each section.

 

This section explores the basics of your business. It includes the name, address, type, and how the business is structured. It also covers payroll details and whether your business uses online sales or digital payment systems. Filling this out accurately helps the IRS understand your business operations and financial setup.

Section 2: Business Personnel and Contacts


This section asks for details about key people in your business, such as partners, officers, or major shareholders. You’ll need to provide their names, contact information, and roles. It also asks about their ownership percentage and annual salary. This information helps the IRS identify who is responsible for business decisions and tax matters.

Section 3: Other Financial Information

This section covers additional details about your business, such as lawsuits, bankruptcy filings, and any significant asset transfers. It also asks if the business has loans or related financial obligations. Providing this information helps the IRS understand your business’s financial history and any factors that might affect your ability to pay tax debts.

Section 4: Business Asset and Liability Information

This section gives a complete view of your business’s finances. It includes details on cash, bank accounts, and any money owed to your business. You’ll also need to list investments, available credit, real estate, and vehicles your business owns or leases. Additionally, include any equipment, intangible assets like patents, and outstanding debts. Accurately filling out this section helps the IRS assess your business’s financial health and ability to pay its tax debt.

Section 5: Monthly Income/Expenses Statement for Business

This section captures your business’s average monthly income and expenses. You need to provide details about your revenue sources like sales, rental income, and any other earnings. Then, list your monthly expenses, including costs for materials, wages, rent, utilities, and taxes. The goal is to show your business’s net income after all expenses are deducted. This helps the IRS understand your business’s cash flow and ability to meet tax obligations.

Wrapping Up!

One of the most important steps in resolving your company’s tax issues is to complete your 433B form and 433-B (OIC) accurately. By providing a clear financial snapshot, you show the IRS that you’re serious about finding a solution and willing to cooperate.

A few extra tips to keep in mind:

  • Always double-check your entries for accuracy and completeness
  • Don’t forget to attach all supporting documents like bank statements and expense receipts. 
  • If your financial situation changes, be proactive and update the IRS. 

Go through the 433-B instructions carefully to ensure you don’t miss out on any important details.

Managing these forms can be stressful, but Peter Salinger is here to help. With years of experience, he ensures every detail is handled accurately and guides you through the process for the best possible outcome.

He can also assist you with other tax relief forms, such as Form 656 IRS for applying for an Offer in Compromise, and Form 433-A for individual financial disclosure.

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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