What Is Form 433-B and How Do You Fill It Out?
Understand how to complete Form 433-B, the Collection Information Statement for Businesses, to accurately present your financials to the IRS for tax resolution.
When a business has a tax liability it cannot immediately pay, the Internal Revenue Service (IRS) uses Form 433-B, “Collection Information Statement for Businesses,” to assess the company’s finances. The form provides a snapshot of the business’s assets, liabilities, income, and expenses to help the agency determine its ability to pay the tax debt. This form is for business entities like corporations, partnerships, and limited liability companies (LLCs), distinguishing it from forms used for individuals. The information helps the IRS decide on a course of action, such as a payment plan or other collection alternatives.
Information and Documentation to Gather
Before starting Form 433-B, you must collect several financial documents. You must use the correct version of the form for your situation. The standard Form 433-B is for general collection purposes, while Form 433-B (OIC) is required when submitting an Offer in Compromise.
You will need complete bank statements for all business accounts, including checking and savings. You must also provide information on other assets, such as accounts with payment processors like PayPal or virtual currency holdings. To calculate average monthly figures, you can select a representative period for your business, such as the last 3, 6, or 12 months.
Compile detailed records of business assets and liabilities. This includes a current accounts receivable aging report listing all money owed to the business and an accounts payable aging report detailing money your business owes. For physical assets, you will need deeds and mortgage statements for real estate, along with titles and loan statements for business vehicles.
Recent financial and payroll records are also needed to complete the form. This involves gathering profit and loss (P&L) statements, balance sheets, and payroll records for the same representative period. These records should detail gross wages, payroll taxes, and information for all employees and corporate officers.
Completing Form 433-B Section by Section
Fill out each section of Form 433-B using the documents you have gathered, ensuring the information is accurate and consistent.
Business Information
The initial section requests basic identifying details about your business. You will enter the business name, address, Employer Identification Number (EIN), contact information, business structure, and accounting method.
Personnel and Wages
This section requires information about individuals associated with the business. List all partners, officers, or major shareholders, including their names, titles, and percentage of ownership. Using your payroll records, provide details on all employees, their pay rates, and the total gross payroll for recent periods.
Business Assets
List all assets owned by the business. Using your bank statements, report the cash on hand and current balances in all business bank accounts. Transfer the totals from your accounts receivable aging report, and enter details for real estate, vehicles, and other business equipment using your supporting documents.
Monthly Business Income and Expenses
Calculate the business’s average monthly income and expenses using your P&L and bank statements from your chosen representative period. The form provides categories for gross receipts, cost of goods sold, and operating expenses like rent, utilities, and payroll. This presents a monthly net income figure for the IRS to assess your ability to make payments.
Submission and What Happens Next
After completing and signing Form 433-B, assemble the submission package. Include the original, signed form and legible copies of all supporting financial documents. Organize the documents in the same order the information appears on the form.
Send the completed package to the specific IRS address or revenue officer that requested it, which is included in the notice you received. Use a trackable mailing service, such as USPS Certified Mail, to create a record of delivery. This provides proof that the IRS received your submission and on what date.
Once submitted, an IRS agent will review the form and documents to determine your business’s repayment capability. Based on this analysis, the IRS will decide on a collection path. This could result in an installment agreement, a determination that the business is Currently Not Collectible, or a suggestion to explore an Offer in Compromise. The IRS will communicate its decision in writing.