The IRS 433-F form is a financial disclosure document used by taxpayers to provide the Internal Revenue Service (IRS) with detailed information about their income, expenses, and assets. This form is often required during the process of negotiating a payment plan or settling tax debts. Understanding its components is essential for effectively managing tax obligations and ensuring compliance with IRS requirements.
The IRS 433-F form plays a crucial role in the process of negotiating tax liabilities with the Internal Revenue Service. This form is primarily used by individuals and businesses to provide a comprehensive overview of their financial situation. By detailing income, expenses, assets, and liabilities, the 433-F assists the IRS in evaluating a taxpayer's ability to pay their tax debts. It serves as a vital tool for those seeking to enter into payment plans, offers in compromise, or other arrangements with the IRS. Completing this form accurately is essential, as it can significantly impact the outcome of negotiations. Understanding the requirements and implications of the IRS 433-F form can empower taxpayers to take control of their financial obligations and work towards resolving their tax issues effectively.
What is the IRS 433-F form?
The IRS 433-F form is a financial statement used by the Internal Revenue Service (IRS) to gather information about an individual's or business's financial situation. This form helps the IRS assess a taxpayer's ability to pay their tax debts. It includes details about income, expenses, assets, and liabilities. By providing this information, taxpayers can facilitate discussions regarding payment plans, offers in compromise, or other resolutions to settle their tax obligations.
Who needs to fill out the IRS 433-F form?
Typically, individuals or businesses that owe back taxes or are unable to pay their tax liabilities in full may need to fill out the IRS 433-F form. If you are seeking to establish a payment plan, request an offer in compromise, or negotiate your tax debt, this form is essential. It provides the IRS with a clear picture of your financial situation, enabling them to offer you appropriate options based on your ability to pay.
How do I complete the IRS 433-F form?
Completing the IRS 433-F form involves several steps. Start by gathering all necessary financial documents, including pay stubs, bank statements, and information about any assets you own. Fill out the form accurately, providing detailed information about your income, monthly expenses, and any debts. Be honest and thorough, as inaccuracies can lead to complications with your case. Once completed, you can submit the form to the IRS along with any additional documentation required for your specific situation.
What happens after I submit the IRS 433-F form?
After submitting the IRS 433-F form, the IRS will review the information provided. They may reach out for clarification or additional documentation if needed. Depending on your financial situation, the IRS will propose options for resolving your tax debt, such as a payment plan or an offer in compromise. It’s important to respond promptly to any communications from the IRS to keep the process moving smoothly. Staying engaged will help ensure you reach a resolution that works for you.
When filling out and using the IRS 433-F form, it is important to keep several key points in mind. This form is utilized for collecting financial information from taxpayers, primarily for the purpose of determining their ability to pay tax liabilities. Below are essential takeaways regarding the form.
The IRS 433-F form is often misunderstood, leading to confusion about its purpose and requirements. Here are eight common misconceptions about this form:
Understanding these misconceptions can help taxpayers navigate their financial obligations more effectively and engage with the IRS in a more informed manner.
Form 433-F
(February 2019)
Department of the Treasury - Internal Revenue Service
Collection Information Statement
Name(s) and Address
Your Social Security Number or Individual Taxpayer Identification Number
Your Spouse’s Social Security Number or Individual Taxpayer Identification Number
If address provided above is different than last return filed,
Your telephone numbers
Spouse’s telephone numbers
please check here
Home:
County of Residence
Work:
Cell:
Enter the number of people in the household who can be claimed on this year’s tax return including you and your spouse. Under 65
65 and Over
If you or your spouse are self employed or have self employment income, provide the following information:
Name of Business
Business EIN
Type of Business
Number of Employees (not counting owner)
A. ACCOUNTS / LINES OF CREDIT
PERSONAL BANK ACCOUNTS Include checking, online, mobile (e.g., PayPal), savings accounts, money market accounts. (Use additional sheets if necessary.)
Name and Address of Institution
Account Number
Type of Account
Current
Balance/Value
Check if
Business Account
INVESTMENTS Include Certificates of Deposit, Trusts, Individual Retirement Accounts (IRAs), Keogh Plans, Simplified Employee Pensions, 401(k) Plans, Profit Sharing Plans, Mutual Funds, Stocks, Bonds, Commodities (Silver, Gold, etc.), and other investments. If applicable, include business accounts. (Use additional sheets if necessary.)
VIRTUAL CURRENCY (CRYPTOCURRENCY) List all virtual currency you own or in which you have a financial interest (e.g., Bitcoin, Ethereum, Litecoin, Ripple, etc.). (Use additional sheets if necessary.)
Type of Virtual Currency
Name of Virtual Currency Wallet,
Exchange or Digital Currency
Exchange (DCE)
Email Address Used to Set-up
With the Virtual Currency
Exchange or DCE
Location(s) of Virtual Currency (Mobile Wallet, Online, and/or External Hardware storage)
Virtual Currency
Amount and Value in US dollars as of today (e.g., 10 Bitcoins $64,600 USD)
B. REAL ESTATE Include home, vacation property, timeshares, vacant land and other real estate. (Use additional sheets if necessary.)
Description/Location/County
Monthly Payment(s)
Financing
Current Value
Balance Owed
Equity
Year Purchased
Purchase Price
Primary Residence
Other
Year Refinanced
Refinance Amount
C. OTHER ASSETS Include cars, boats, recreational vehicles, whole life policies, etc. Include make, model and year of vehicles and name of Life Insurance company in Description. If applicable, include business assets such as tools, equipment, inventory, etc. (Use additional sheets if necessary.)
Description
Monthly Payment Year Purchased Final Payment (mo/yr) Current Value
/
D. CREDIT CARDS (Visa, MasterCard, American Express, Department Stores, etc.)
Type
Credit Limit
Minimum Monthly Payment
TURN PAGE TO CONTINUE
Catalog Number 62053J
www.irs.gov
Form 433-F (Rev. 2-2019)
Page 2 of 4
E. BUSINESS INFORMATION Complete E1 for Accounts Receivable owed to you or your business. (Use additional sheets if necessary.) Complete E2 if you or your business accepts credit card payments. Include virtual currency wallet, exchange or digital currency exchange.
E1. Accounts Receivable owed to you or your business
Name
Address
Amount Owed
List total amount owed from additional sheets
Total amount of accounts receivable available to pay to IRS now
E2. Name of individual or business on account
Credit Card
(Visa, Master Card, etc.)
Issuing Bank Name and Address
Merchant Account Number
F. EMPLOYMENT INFORMATION If you have more than one employer, include the information on another sheet of paper. (If attaching a copy of current pay stub, you do not need to complete this section.)
Your current Employer (name and address)
How often are you paid (check one)
Weekly
Biweekly
Semi-monthly
Monthly
Gross per pay period
Taxes per pay period (Fed)
(State)
(Local)
How long at current employer
Spouse’s current Employer (name and address)
G. NON-WAGE HOUSEHOLD INCOME List monthly amounts. For Self-Employment and Rental Income, list the monthly amount received after expenses or taxes and attach a copy of your current year profit and loss statement.
Alimony Income
Child Support Income
Net Self Employment Income
Net Rental Income
Unemployment Income
Pension Income
Interest/Dividends Income
Social Security Income
Other:
H. MONTHLY NECESSARY LIVING EXPENSES List monthly amounts. (For expenses paid other than monthly, see instructions.)
1. Food / Personal Care See instructions. If you do not spend more than
4. Medical
Actual Monthly
IRS Allowed
the standard allowable amount for your family size, fill in the Total amount
Health Insurance
Expenses
only.
Out of Pocket Health Care
Food
Total
Housekeeping Supplies
Clothing and Clothing Services
5. Other
Personal Care Products & Services
Miscellaneous
Child / Dependent Care
Estimated Tax Payments
2. Transportation
Term Life Insurance
Retirement (Employer Required)
Gas / Insurance / Licenses /
Retirement (Voluntary)
Parking / Maintenance etc.
Union Dues
Public Transportation
Delinquent State & Local Taxes
(minimum payment)
3. Housing & Utilities
Student Loans (minimum
payment)
Rent
Court Ordered Child Support
Electric, Oil/Gas, Water/Trash
Court Ordered Alimony
Telephone/Cell/Cable/Internet
Other Court Ordered Payments
Real Estate Taxes and Insurance
Other (specify)
(if not included in B above)
Maintenance and Repairs
Under penalty of perjury, I declare to the best of my knowledge and belief this statement of assets, liabilities and other information is true, correct and complete.
Your signature
Spouse’s signature
Date
Page 3 of 4
Instructions for Form 433-F, Collection Information Statement
What is the purpose of Form 433F?
Form 433-F is used to obtain current financial information necessary for determining how a wage earner or self-employed individual can satisfy an outstanding tax liability.
Note: You may be able to establish an Online Payment Agreement on the IRS web site. To apply online, go to https://www.irs.gov, click on “I need to pay my taxes,” and select “Installment Agreement” under the heading “What if I can't pay now?”
If you are requesting an Installment Agreement, you should submit Form 9465, Installment Agreement Request, along with Form 433-F. (A large down payment may streamline the installment agreement process, pay your balance faster and reduce the amount of penalties and interest.
Please retain a copy of your completed form and supporting documentation. After we review your completed form, we may contact you for additional information. For example, we may ask you to send supporting documentation of your current income or substantiation of your stated expenditures.
If any section on this form is too small for the information you need to supply, please use a separate sheet.
Section A – Accounts / Lines of Credit
List all accounts, even if they currently have no balance. However, do not enter bank loans in this section. Include business accounts, if applicable. If you are entering information for a stock or bond, etc. and a question does not apply, enter N/A.
Section B – Real Estate
List all real estate you own or are purchasing including your home. Include insurance and taxes if they are included in your monthly payment. The county/description is needed if different than the address and county you listed above. To determine equity, subtract the amount owed for each piece of real estate from its current market value.
Section C – Other Assets
List all cars, boats and recreational vehicles with their make, model and year. If a vehicle is leased, write “lease” in the “year purchased” column. List whole life insurance policies with the name of the insurance company. List other assets with a description such as “paintings”, “coin collection”, or “antiques”. If applicable, include business assets, such as tools, equipment, inventory, and intangible assets such as domain names, patents, copyrights, etc. To determine equity, subtract the amount owed from its current market value. If you are entering information for an asset and a question does not apply, enter N/A.
Section D – Credit Cards
List all credit cards and lines of credit, even if there is no balance owed.
Section E – Business Information
Complete this section if you or your spouse are self-employed, or have self-employment income. This includes self-employment income from online sales.
E1: List all Accounts Receivable owed to you or your business. Include federal, state and local grants and contracts.
E2: Complete if you or your business accepts credit card payments (e.g., Visa, MasterCard, etc.) and/or virtual currency wallet, exchange or digital currency exchange.
Section F – Employment Information
Complete this section if you or your spouse are wage earners.
If attaching a copy of current pay stub, you do not need to complete this section.
Section G – Non-Wage Household Income
List all non-wage income received monthly.
Net Self-Employment Income is the amount you or your
spouse earns after you pay ordinary and necessary monthly business expenses. This figure should relate to the yearly net profit from Schedule C on your Form 1040 or your current year profit and loss statement. Please attach a copy of Schedule C or your current year profit and loss statement. If net income is a loss, enter “0”.
Net Rental Income is the amount you earn after you pay ordinary and necessary monthly rental expenses. This figure should relate to the amount reported on Schedule E of your Form 1040.
Do not include depreciation expenses. Depreciation is a non-cash expense. Only cash expenses are used to determine ability to pay).
If net rental income is a loss, enter “0”.
Other Income includes distributions from partnerships and subchapter S corporations reported on Schedule K-1, and from limited liability companies reported on Form 1040, Schedule C, D or E. It also includes agricultural subsidies, gambling income, oil credits, and rent subsidies. Enter total distributions from IRAs if not included under Pension Income.
Section H – Monthly Necessary Living Expenses
Enter monthly amounts for expenses. For any expenses not paid monthly, convert as follows:
If a bill is paid …
Calculate the monthly
amount by …
Quarterly
Dividing by 3
Multiplying by 4.3
Biweekly (every two
Multiplying by 2.17
weeks)
Semimonthly (twice
Multiplying by 2
each month)
Page 4 of 4
For expenses claimed in boxes 1 and 4, you should provide the IRS allowable standards, or the actual amount you pay if the amount exceeds the IRS allowable standards. IRS allowable standards can be found by accessing https://www.irs.gov/ businesses/small-businesses-self-employed/collection-financial- standards.
Substantiation may be required for any expenses over the standard once the financial analysis is completed.
The amount claimed for Miscellaneous cannot exceed the standard amount for the number of people in your family. The miscellaneous allowance is for expenses incurred that are not included in any other allowable living expense items. Examples are credit card payments, bank fees and charges, reading material and school supplies.
If you do not have access to the IRS web site, itemize your actual expenses and we will ask you for additional proof, if required. Documentation may include pay statements, bank and investment statements, loan statements and bills for recurring expenses, etc.
Housing and Utilities – Includes expenses for your primary residence. You should only list amounts for utilities, taxes and insurance that are not included in your mortgage or rent payments.
Rent – Do not enter mortgage payment here. Mortgage payment is listed in Section B.
Transportation – Include the total of maintenance, repairs, insurance, fuel, registrations, licenses, inspections, parking, and tolls for one month.
Public Transportation – Include the total you spend for public transportation if you do not own a vehicle or if you have public transportation costs in addition to vehicle expenses.
Medical – You are allowed expenses for health insurance and out-of-pocket health care costs.
Health insurance – Enter the monthly amount you pay for yourself or your family.
Out-of-Pocket health care expenses – are costs not
covered by health insurance, and include:
•Medical services
•Prescription drugs
•Dental expenses
•Medical supplies, including eyeglasses and contact lenses. Medical procedures of a purely cosmetic nature, such as plastic surgery or elective dental work are generally not allowed.
Child / Dependent Care – Enter the monthly amount you pay for the care of dependents that can be claimed on your Form 1040.
Estimated Tax Payments – Calculate the monthly
amount you pay for estimated taxes by dividing the quarterly amount due on your Form 1040ES by 3.
Life Insurance – Enter the amount you pay for term life insurance only. Whole life insurance has cash value and should be listed in Section C.
Delinquent State & Local Taxes – Enter the minimum
amount you are required to pay monthly. Be prepared to provide a copy of the statement showing the amount you owe and if applicable, any agreement you have for monthly payments.
Student Loans – Minimum payments on student loans for the taxpayer’s post-secondary education may be allowed if they are guaranteed by the federal government. Be prepared to provide proof of loan balance and payments.
Court Ordered Payments – For any court ordered
payments, be prepared to submit a copy of the court order portion showing the amount you are ordered to pay, the signatures, and proof you are making the payments. Acceptable forms of proof are copies of cancelled checks or copies of bank or pay statements.
Other Expenses not listed above – We may allow
other expenses in certain circumstances. For example, if the expenses are necessary for the health and welfare of the taxpayer or family, or for the production of income. Specify the expense and list the minimum monthly payment you are billed.
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Inaccurate Personal Information: Many individuals fail to provide correct details such as their name, address, or Social Security number. This can lead to delays or complications in processing the form.
Omitting Income Sources: Some people forget to list all sources of income. It’s essential to include wages, self-employment income, and any other earnings to give a complete financial picture.
Underestimating Monthly Expenses: Individuals often miscalculate their monthly living expenses. Providing accurate figures helps the IRS assess your financial situation more fairly.
Failing to Sign the Form: A common oversight is not signing the IRS 433-F form. Without a signature, the form is considered incomplete and may not be processed.
Ignoring Additional Documentation: Some forget to attach necessary supporting documents, such as pay stubs or bank statements. These can validate the information provided and strengthen your case.
Incorrectly Reporting Assets: Individuals may misreport or fail to report assets such as property, vehicles, or savings. This can lead to penalties or miscalculations in tax liabilities.
Not Updating Information: If there are changes in financial circumstances, such as job loss or increased expenses, failing to update the form can lead to inaccurate assessments.
Rushing the Process: Many people hurry through the form, which can result in mistakes. Taking the time to review each section can prevent errors.
Misunderstanding IRS Instructions: Some individuals do not fully understand the instructions provided with the form. Clarifying any uncertainties can help ensure accurate completion.
Neglecting to Keep Copies: After submitting the form, failing to keep a copy for personal records can create issues in the future. It’s wise to maintain documentation for reference.
When filling out the IRS 433-F form, it is essential to follow certain guidelines to ensure accuracy and compliance. Here are seven things you should and shouldn't do:
The IRS Form 433-F is a financial disclosure form used by individuals to provide the IRS with information about their financial situation. A similar document is the IRS Form 433-A, which is also a financial disclosure form but is typically used by individuals who are self-employed or have complex financial situations. While both forms require detailed information about income, expenses, assets, and liabilities, Form 433-A includes additional sections for business income and expenses, making it more suitable for those who operate a business.
Another document that resembles Form 433-F is the IRS Form 433-B. This form is specifically designed for businesses to disclose their financial information to the IRS. Like Form 433-F, it requires details about the business's assets, liabilities, income, and expenses. However, Form 433-B focuses on the financial status of the business entity rather than an individual, making it essential for business owners dealing with tax issues.
IRS Form 9465 is also related, as it is used to request a payment plan for tax liabilities. While Form 433-F provides a comprehensive view of an individual's financial situation, Form 9465 uses that information to assess the ability to pay and set up a monthly payment plan. The two forms work together; the financial details in Form 433-F help determine the terms of the payment agreement established in Form 9465.
Form 1040 is another document that shares similarities with Form 433-F. Both forms require individuals to report their income and financial details. However, Form 1040 is primarily a tax return form, focusing on income and deductions for the year, while Form 433-F is used for financial disclosure in situations like tax negotiations or installment agreements. Together, they provide a fuller picture of an individual's financial status for tax purposes.
The IRS Form 656 is related as it is used to submit an Offer in Compromise, which allows taxpayers to settle their tax debts for less than the full amount owed. When submitting Form 656, taxpayers often need to include Form 433-F to demonstrate their financial situation. The information on Form 433-F helps the IRS evaluate whether the offer is reasonable based on the taxpayer's ability to pay.
IRS Form 8821, which is a Tax Information Authorization form, also has a connection to Form 433-F. While Form 433-F discloses financial information, Form 8821 allows a third party to receive confidential tax information from the IRS. This is important for individuals who may want to have a tax professional handle their financial disclosures or negotiations with the IRS, ensuring that the professional has access to the necessary information.
Another related document is the IRS Form 4506-T, which is a request for a transcript of tax return information. While not a financial disclosure form, it can be used in conjunction with Form 433-F. Taxpayers may need to provide transcripts of previous tax returns to support the financial information disclosed in Form 433-F, especially during negotiations or when applying for a payment plan.
For individuals navigating the vehicle sales process in Virginia, familiarity with the Virginia Motor Vehicle Bill of Sale is essential, as it ensures the proper transfer of ownership. This important document serves as proof of the transaction, enabling the buyer to register the vehicle thereafter. To assist in this process, you can find a convenient template at https://vehiclebillofsaleform.com/virginia-motor-vehicle-bill-of-sale-template/, which simplifies the completion of the necessary paperwork.
Form 656-L, the Offer in Compromise for doubt as to liability, is another document that can be seen as similar. This form is used when a taxpayer believes they do not owe the tax liability in question. Like Form 433-F, it requires financial information to assess the taxpayer's situation. Both forms are integral in resolving tax disputes with the IRS, as they provide the necessary financial context for the taxpayer's claims.
Lastly, the IRS Form 1040X, which is an amended tax return, is also relevant. If an individual needs to amend their tax return due to changes in their financial situation, they may need to provide updated information that reflects their current financial status. While Form 1040X is focused on correcting tax filings, it may require financial details similar to those found in Form 433-F, especially if the amendments affect the taxpayer's ability to pay or their overall tax liability.