IRS Form 433-A: Guide for Individuals With Tax Debt

When you request certain forms of assistance from the IRS, they will take steps to gather financial information from you—that’s where Form 433-A comes in. Form 433-A is a very detailed tax relief form that gives the IRS an in-depth look at your financial situation and ability to pay your tax debt. 

If you are applying for currently not collectible status or partial payment installment agreement, often known as a PPIA, you may need to fill out IRS Form 433-A. There is also a variation of the form, known as the 433-A OIC, that is intended for those requesting an Offer in Compromise.

What is Form 433-A?

Form 433-A, Collection Information Statement for Wage Earners and Self-Employed Individuals, is a six-page form that requires you to disclose everything about your current financial situation. 

Who Has to Fill It Out?

This form is intended for use by those who owe income taxes, are responsible for a Trust Fund Recovery Penalty, and either have standard employment income or are self-employed. People generally required to fill out this form include those who are requesting a partial payment installment agreement. It may also be required of those who cannot qualify for a streamlined installment agreement but still want to pay their taxes over time. The IRS’s goal in reviewing this form is to assess an individual’s ability to pay their back taxes and find a suitable payment arrangement for them.

Form 433-A Vs. Other 433 Forms

There are many variations of Form 433, and if you aren’t careful, you could end up filling out the wrong form and delaying your tax relief. Learn more about the key differences between Form 433-A and other 433 forms.

433-B

Similar to IRS Form 433-A, 433-B is required of those who are requesting relief from the IRS. However, it is reserved for those who are applying for relief on behalf of a business. The form collects detailed information on a business’s assets, profits, debts, and other financial data.

433-F

Form 433-F is similar to 433-A in several ways, but it is considerably less detailed than 433-A. It’s only two pages long, compared to the six pages you’ll need to fill out for IRS Form 433-A. It’s generally required for those asking for help with standard payment plans or those who wish to be considered currently not collectible.

433-A Offer in Compromise

This form is very similar to 433-A, but it is eight pages long and allows you to calculate the amount you can offer for an Offer in Compromise. 433-A OIC is included in the IRS Form 656 booklet, which you will need to fill out to request an Offer in Compromise. Much of the additional information requested in this form is specifically included with an Offer in Compromise in mind.

433-B Offer in Compromise

This is the business’s version of the 433-A OIC form. Businesses requesting an Offer in Compromise will need to fill this out and submit it with their offer to be considered for relief.

How to Fill Out Form 433-A

This is perhaps one of the most in-depth and time-consuming forms you will ever fill out when handling unpaid back taxes, so it’s worth your time to have all the necessary paperwork and documentation on hand.

Information and Documentation You Will Need

Information you will need to fill out this form accurately and completely includes:

• Employer information for you and your spouse, including the duration of your employment, occupation title, dependents claimed on Form 1040, and your pay schedule
• Information regarding any past or current bankruptcy filings
• Information on any time spent living abroad in the past 10 years
• Information on any trusts, estates, or life insurance policies for which you are a beneficiary
• Safe deposit box information
• Asset transfers within the past 10 years
• How much money you have on hand, both in cash and held in accounts
• Account balances for all bank accounts
• Account balances for all investments and equity within each investment if applicable
• Digital asset information, such as cryptocurrency and NFTs
• Available credit in credit cards and lines of credit
• Real property that you own or are in the process of purchasing, including equity held within each piece of property
• Equity in your vehicles and the amount owed on each vehicle
• Any other personal assets, such as artwork, furniture, jewelry, and collections
• Monthly income from all sources
• A specific breakdown of living expenses
• If applicable, business information and sole proprietorship information

Step-by-Step Instructions

1. The first part of Form 433-A deals with your personal information. You will need to provide your name, your spouse’s name if applicable, your address and phone number, marital status, and information for anyone else living in your household.
2. The second section sums up employment information for wage earners on the application. You’ll input your employment information and your spouse’s employment information if you are both traditionally employed.
3. As you fill out Section 3, note that you must also attach any applicable documentation relating to the questions you answer. You will need to indicate whether or not you are party to a lawsuit, if you are filing or have ever filed bankruptcy, if you have lived abroad, if you are the beneficiary of a trust or estate, if you contribute to a trust, if you have a safe deposit box, and if you have transferred any assets in the previous 10 years for less than their fair market value.
4. Section 4 is one of the more time-consuming parts of this form. After filling out how much cash you have on hand, you will go on to provide detailed account and account balance information for your bank accounts, investments, digital assets, available credit, life insurance, real property, vehicles, and other personal assets. You must include both assets held in the United States and those held in foreign countries.
5. In Section 5, you will provide a thorough breakdown of your income and expenses. Start by detailing your total income. The form breaks down your income into wages, interest and dividends, business income, rental income, distributions, pensions, Social Security, child support, and alimony.
6. The second part of Section 5 covers your living expenses. Break down how much you spend each month on food and clothing, housing and utilities, vehicle ownership and operating costs, public transportation, health insurance, healthcare costs, court-ordered payments, childcare, life insurance, current taxes, secured debts, delinquent state and local taxes, and other expenses. If you have secured debts or other expenses, you will need to attach a list to the form when you submit it.
7. The final step in filling out Section 5 is adding up your total living expenses and subtracting that amount from your total income.
8. Sections 6 and 7 are reserved for taxpayers who are self-employed. Section 6 requests information on the business’s name and address, phone number, EIN, industry, number of employees, and average monthly payroll. You must also provide information on payment processors, credit cards you accept, business bank accounts, and notes receivable. Finally, provide a list of your business assets and the equity in each asset.
9. Section 7 requests information on your sole proprietorship. You’ll start by listing your total monthly business income, categorized by gross receipts, gross rental income, interest, dividends, cash receipts, and other income. Your business expenses are broken down into materials, inventory, wages and salaries, rent, supplies, utilities and phone costs, vehicle gasoline and oil, repairs and maintenance, insurance, current taxes, and other expenses.
10. After you have double-checked everything on Form 433-A for accuracy, ensure that you have attached all necessary supporting documentation before submitting the form to the IRS.

433-A Examples and Scenarios 

People of varying financial situations may fill out Form 433-A to find out if they can qualify for a partial payment installment agreement. Outcomes vary depending on each individual’s financial status, allowable expenses, and funds on hand.

Example 1: Likely to Result in Approval

Taxpayer A is filling out Form 433-A to seek relief for their tax debt. They were not approved for a standard payment plan because the minimum monthly payment was much too high for them to afford. However, they can afford to make some payments toward their debt.

When they fill out Form 433-A, all of their monthly expenses are within the allowable limits provided by the IRS. Taxpayer A earns $2,000 per month in income and receives $100 per month in child support. After all of their expenses are accounted for, they have $200 left per month. Their tax debt is sizable, and the minimum monthly payment allowed by the IRS for a standard payment plan is $525. Since they cannot afford that but can afford partial payments, the IRS may accept their request for a PPIA.

Example 2: Unlikely to Result in Approval

Taxpayer B is similar to Taxpayer A in several ways. They have substantial tax debt, and the minimum monthly payment allowed for their balance is not enough if you just look at their income. Like Taxpayer A, they earn $2,000 per month and bring in $100 per month for child support. 

However, when the IRS looks at their assets, they see that Taxpayer B has two vehicles, both with at least $6,000 in equity. Additionally, Taxpayer B owns a home that is nearly paid off and has close to $200,000 in equity. Because Taxpayer B could use those assets to pay off their tax debt, even though their income has dropped substantially over the years, the IRS would be unlikely to approve them for a PPIA. They would expect them first to tap into their asset equity.

Issues and Concerns

Certain issues often arise with people filling out Form 433-A. Since the IRS relies on this form to be filled out completely and accurately, addressing these issues ahead of time can help you avoid unnecessary delays.

Complexity and Length

You will likely need a lot of supporting documentation to fill out this form, and tracking down that information can be overwhelming and stressful if you’re already consumed by your tax debt. Commit to collecting a few forms every day until you have everything you need. This may include recent pay stubs, account statements, and information on fair market value for each of your assets.

Inaccurate Statements

The more information you have to provide, the easier it is to slip up at some point and provide inaccurate information or exclude information entirely. Do not rush through this form; take your time and double-check each section before submitting it to the IRS.

Failure to Disclose Assets

People sometimes forget to disclose assets, particularly if they are unusual. For example, an artwork collection may be personally valuable but also hold substantial financial value. Failing to disclose that could raise a red flag with the IRS if they find out about it.

Frequently Asked Questions 

Do I need to fill out Form 433-A?

You may need to fill out Form 433-A if you have requested tax relief from the IRS. They may request that you submit this form so they can get a better understanding of your financial situation and your overall ability to pay.

How much information do I need to provide?

Form 433-A is one of the most in-depth forms that the IRS requests of individuals, so you should set aside plenty of time to gather the necessary documentation and fill out the form accurately.

Do I need professional assistance with Form 433-A?

Some taxpayers choose to request IRS assistance alone, but others may choose to work with a professional if they are overwhelmed or confused by their options. If you have been putting off filling out this form because you get overwhelmed every time you look at it, bringing in professional help may allow you to move forward in your quest for tax relief.

What happens after I submit Form 433-A?

The IRS will process it and assess the information on the form. They may approve your request for assistance by allowing you to sign up for a partial payment installment agreement or another form of relief. If you can afford the amount they are asking you to pay, you can move forward with their offer or consider another avenue.

Asking the IRS for tax relief can be stressful, but it’s the first step in getting your tax situation under control and being proactive about your financial well-being. If you’re struggling with Form 433-A or are uncertain of your repayment options, we can help. Call Seattle Legal Services at 206-536-3152 or contact us online to get started.