How to Complete IRS Form 433-A for Tax Relief

The Internal Revenue Service uses Form 433-A, Collection Information Statement for Wage Earners and Self-Employed Individuals, to get a detailed look at a person’s financial standing. The main reason for the form is to give the IRS a complete picture of an individual’s finances to help them figure out if a person can pay back a tax debt. This form is for individuals, including wage earners and the self-employed, and is different from Form 433-B, which is used for businesses.

When the IRS Requires Form 433-A

The IRS requires Form 433-A when a taxpayer seeks a specific solution for a tax debt and the agency needs to verify their financial situation. One common reason is when applying for an Offer in Compromise (OIC), which is an agreement to settle the tax debt for less than the full amount owed. In this case, a special version of the form, Form 433-A (OIC), is used to show the IRS that the offer being made is the most the person can afford to pay.

Another situation is when requesting an Installment Agreement, especially for larger tax debts. If the amount owed is more than $50,000, an IRS revenue officer will likely require Form 433-A to confirm the taxpayer can handle the proposed monthly payments. The form is also necessary when a taxpayer can make some payments but not enough to cover the full debt within the standard timeframe, leading to a Partial Payment Installment Agreement (PPIA).

The IRS may also require Form 433-A when considering placing a taxpayer in Currently Not Collectible (CNC) status. This status is for individuals experiencing severe financial hardship who cannot afford to pay their tax debt at the present time. The form provides the detailed financial evidence the IRS needs to approve this temporary suspension of collection activities.

Required Information and Supporting Documents

Before starting Form 433-A, gathering all the necessary financial documents simplifies the process. You will need to provide documentation for the following categories:

• Personal Information: The full names, addresses, and Social Security Numbers (SSNs) or Individual Taxpayer Identification Numbers (ITINs) for yourself, your spouse, and any dependents you claim.
• Income Verification: Recent pay stubs covering the last three months for yourself and your spouse. If self-employed, you will need income records for the same period, such as invoices or a profit and loss statement. Documentation for other income, like pensions or Social Security, is also required.
• Asset Documentation: Bank statements for all checking, savings, and online payment platform accounts for the last three months. You will also need statements for investment accounts, retirement accounts like 401(k)s or IRAs, and any life insurance policies with a cash value. For real estate you own, gather the property deed and mortgage statements. For all vehicles, you will need the title or registration and loan statements.
• Proof of Monthly Expenses: This includes mortgage or rent statements, recent utility bills, and statements for car loans or student loans. You will also need credit card statements and proof of health insurance premium payments.

A Section-by-Section Guide to Completing Form 433-A

You can download the most current version of the form from the IRS website. Accurately completing Form 433-A requires careful attention to each section, using the documents you have gathered.

Section 1 is for personal and household information, where you will enter your name, address, Social Security Number, and details about your spouse and dependents. Section 2 is for employment information for wage earners. You will use your recent pay stubs to provide details about your employer, pay period, and deductions.

Section 3 covers other financial information, such as whether you are involved in a lawsuit, have filed for bankruptcy, or have a safe deposit box. In Section 4, you will list your personal assets, using your bank statements to list all account numbers and balances, as well as investment and retirement account values. For real estate and vehicles, you must provide the fair market value and the quick sale value, which is typically about 80% of the fair market value.

Section 5 details your monthly income and expenses. You will use your pay stubs and other income documents to calculate your total monthly income. Then, you will list your living expenses for housing, utilities, transportation, and healthcare, using your bills and statements. The IRS has national and local standards for some expenses, which may limit the amount you can claim.

If you are self-employed, you must also complete Sections 6 and 7. Section 6 asks for general information about your business, while Section 7 is a detailed breakdown of your business’s monthly income and expenses. After filling out all applicable sections, you must sign and date the form, certifying that the information is true and correct.

Submitting the Form and Post-Filing Procedures

After completing and double-checking Form 433-A, mail or fax it to the specific IRS office or revenue officer who requested it, as indicated in their instructions. You must attach copies of all supporting documents, such as pay stubs, bank statements, and proof of expenses. A failure to include the required documentation can lead to delays or rejection of your request.

Once received, an IRS agent will review your Form 433-A and supporting documents to determine your ability to pay. The agent may contact you with follow-up questions or for clarification. Based on this review, the IRS will decide on your request for an Offer in Compromise, Installment Agreement, or other collection alternative.