Form 433-A

Form 433-A

A form one files with the IRS when an individual makes an offer in compromise. The form provides financial information to the IRS to help determine how much to withhold each month in paying the individual's back taxes.
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Individual or self-employed taxpayers must submit Form 433-A.
The Service accepts an OIC when it determines that (1) the offer is submitted on the proper version of the form 656 and Form 433-A or B-, as appropriate; (2) the taxpayer is not in bankruptcy; (3) the taxpayer has complied with all filing and payments requirements listed in the Form 656 instructions; (4) the taxpayer has enclosed the application fee, if required; and (5) the offer meets any other minimum requirements established by the Service.
The IRS may require a business taxpayer's officers or partners to complete Form 433-A.
A taxpayer submits an offer on form 656, which must be accompanied by Form 433-A, Collection Information Statement, if the basis for compromise is collectibility.
According to the Research Institute of America, the IRS has said it expects to issue a new Internal Revenue Manual section on offers in compromise to resolve two areas of frequent difficulty: how much the taxpayer needs for "necessary living expenses" and how the taxpayer's assets should be valued on form 433-A.
Since the Bigdebts have filed their return, they can contact an IRS collection office, fill out Form 433-A and enter into an installment agreement.
The taxpayer must submit an offer on form 656 and provide financial information on form 433-A (individuals) or form 433-B (businesses) if the compromise basis is collectibility.
For installment agreements, the key IRS forms are Form 433-A, Collection Information Statement for Individuals, and Form 433-13, Collection Information Statement for Businesses; self-employed taxpayers must use both forms.
It is important that the Form 433-A or 433-B and accompanying materials adequately and fairly present the net amount that may be realized from a sale of a client's assets with proper allowance for expenses of sale, taxes and other costs.
Often, to enter into an installment agreement, a taxpayer is required to provide financial information on Form 433-A, Collection Information Statement for Individuals, particularly when dealing with a Revenue Officer.
A second document, Form 433-A, Collection Information Statement for Individuals, or Form 433B, Collection Information Statement for Businesses, and/or any other financial statement prepared by the taxpayer as long as it contains the information requested on Form 433-A or Form 433-B and is signed under penalty of perjury, must be completed and submitted concurrent with the offer.
Form 433-A, Collection Information Statement for Individuals, and Form 433-B, Collection Information Statement for Businesses, which are shorter and easier to complete, replace the extensive Form 433.