IRS Financial Statements: 433A, 433B & 433F

IRS Financial Statements: 433A, 433B & 433F

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No matter what collection alternative you wish to pursue, you will be required to provide detailed financial information as a precondition to IRS consideration.

The IRS uses several forms for this purpose each of which is discussed below.

Form 433A – IRS Collection Information Statement for Wage Earners and Self-Employed Individuals

The IRS will require that you complete and submit this form if you are a W-2 employee or are self-employed.

In the past, self-employed taxpayers were required to complete both forms 433-A and 433-B. Now all of the required financial information has been combined into one form.

Generally, you are required to provide along with the financial statement your last 3 bank statements (with canceled checks) and documentary evidence of your living expenses.

The Purpose of Form 433A

The IRS uses Form 433Ato determine whether and to what extent a delinquent taxpayer will be able to pay his or her IRS debt.

The taxpayer is required to sign the 433-A under penalties of perjury.

Form 433B- IRS Collection Information Statement for Businesses

This is the business equivalent of Form 433-A and is used for corporations, partnerships, LLCs and other entities to report their financial information.

The IRS will compare this form to your business tax returns. If the numbers vary greatly, it will ask you to provide documentary evidence of your business expenses.

The Purpose of Form 433B

The IRS uses Form 433B to determine whether and to what extent a delinquent business taxpayer will be able to pay its existing tax debt while remaining current with its future tax obligations.

This form also is signed by an authorized representative of the taxpaying entity under penalties of perjury.

Form 433F – Short Form Collection Information Statement

This is a short form version of Form 433-A and is also signed under penalties of perjury.

A Word to the Wise

The terms of your offer in compromise or installment agreement will greatly depend on the data included in the financial statements provided to the IRS collection agent.

We have seen many cases where a taxpayer representing himself signed a financial statement that was prepared by an IRS collection agent.

Typically, the taxpayer is frightened and intimidated and signs the statement without carefully looking at it or having his accountant review it.

Never sign a financial statement (or any statement, waiver or other document) without first having a tax professional review it.

The Taxpayer Bill of Rights specifically states that IRS agents must immediately adjourn any meeting where a taxpayer says he wishes to consult with his attorney or legal representative.

If the IRS agent balks, tries to demean you or your decision to seek counsel, you should immediately ask to speak to his supervisor.

He is violating your rights!

About Peter Pappas

Peter is a tax attorney and certified public acccountant with over 20 years experience helping taxpayers resolve their IRS and state tax problems.

He has represented thousands of taxpayers who have been experiencing difficulty dealing with the Internal Revenue Service or State tax officials.

He is a member of the American Association of Attorney-Certified Public Accountants, the Florida Bar Association and The Florida Institute of Certified Public Accountants and is admitted to practice before the United States Tax Court, the United States Supreme Court, U.S. District Courts - Middle District of Florida

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Comments

  1. Paulo Rodriguez says:

    I have been paying $100 per.month to the IRS for the last year, they want me to pay $350 per month but I cannot do it cause I am a self employee and is running very slow, they send me the form 433f, do I have to fill it or what your advice?