Taxpayer’s Guide to IRS Form 433-F
Collection Information Statement
The IRS uses Form 433-F (Collection Information Statement) to develop an in-depth understanding of a taxpayer’s financial situation. This form helps the IRS to determine your eligibility for different types of payment plans. To obtain the best terms possible for your payment plan, you need to ensure that you fill out this form correctly.
Our tax attorneys have extensive experience negotiating with the IRS. We can help you deal with IRS Form 433-F — To get help, contact us at the W Tax Group today.
When Do You Need to File Form 433-F?
The IRS often requires Form 433-F if you request a payment plan on your tax liability. Here are the situations where you need to complete Form 433-F when applying for a payment plan:
- If you want to make payments on a tax liability over $50,000.
- If your proposed monthly payment isn’t enough to pay off the tax liability in 72 months (six years).
- If you owe more than $25,000 but less than $50,000 and you don’t want to set up direct debit for your payment plan.
You may also need to complete Form 433-F if you want to obtain hardship status from the IRS. The IRS will let you know if you need to file this form.
How to Complete IRS Form 433-F
To complete Form 433-F, you start with basic information such as your Social Security Number (SSN) and contact details. If filing this form for a business, you need the business name, Employer Identification Number (EIN), type of business, and number of employees. Then, you provide information about your assets, liabilities, income, and expenses.
Here are tips on how to complete each section of Form 433-F.
A. Accounts/Lines of Credit
Enter all of your accounts and lines of credit followed by their balances. Make sure to list all accounts even if they don’t have a balance. This includes bank accounts, certificates of deposits (CDs), retirement accounts, and cryptocurrency accounts.
B. Real Estate
List all of your real estate including your primary residence. Note the monthly payment, the year purchased, and the purchase price. If you’ve refinanced, you also need to note the year and refinance amount. Then, note the current value, the amount owed, and the equity in the property. The property’s equity is the difference between what you owe and the property’s value.
C. Other Assets
Other assets may include cars, boats, recreational vehicles, and whole life insurance policies. It also includes coin collections, paintings, antiques, intangible assets, or anything you own of value. Provide a description of these assets, the monthly payment, the year of purchase, and the date of your final payment. Then, note the current value, balance owed, and equity.
D. Credit Cards
List all of your credit cards along with the minimum monthly payment, the credit limit, and the balance on the account. Make sure to include all accounts even if they don’t have a balance or you don’t use them.
E. Business Information
You should complete this section if you or your spouse are self-employed. In the accounts receivables section, simply detail the amounts that your clients owe you. You will need their name, address, and amount owed. If you accept credit cards, you also need to note your merchant account number and other details.
F. Employment Information
In this section, you need to note how often you’re paid, the gross pay per pay period, the taxes per pay period, and how long you’ve been with your employer. Provide these details for both you and your spouse.
G. Non-Wage Household Income
In section G of Form 433-F, you need to note all other household income. This includes alimony, child support, unemployment income, pensions, interest or dividend income, and Social Security payments.
You also need to note self-employment and rental income. In these categories, use net income, which is your income after expenses. To back up self-employment income and expenses, you need to provide a copy of the Schedule C from your tax return or a current profit-and-loss statement. For rental income, you should include a copy of Schedule E. When calculating your net income, do not take depreciation into account. You should only include expenses that directly affect your cash flow.
H. Monthly Necessary Living Expenses
In section H, you need to list all of your monthly expenses including food, personal care, transportation, housing, utilities, medical expenses, child care, child support, student loans, court-ordered payments, and all other expenses. You should note the expense as well as the IRS’s allowance.
The IRS has a set of Collection Financial Standards that outline how much the agency thinks people should spend in various expense categories based on where they live. In most cases, the IRS will only take into account expenses that are at or below the standard. For instance, as of 2022, the IRS thinks that three-person families should spend $903 per month on food. If you spend over that amount, the IRS won’t take into account the excess when assessing your ability to pay your taxes.
Note that the IRS financial standards apply to monthly bills. If you have bills that aren’t paid monthly, you will need to convert them to a monthly amount. For quarterly bills, you should divide by three. For weekly bills, multiply by 4.3. For biweekly bills, multiply by 2.17. For semi-monthly bills, multiply by two.
Where to Mail IRS Form 433-F
The mailing address for Form 433-F varies depending on where you live. Typically, you submit this form when you file Form 9465 (Installment Agreement Request). If you’re submitting Form 9465 by itself, send it along with Form 433-F and any other required information to the address in the Form 9465 instructions.
If desired, you can also submit a request for a payment plan when you file your taxes. In this case, you should attach these documents to your tax return, and you should mail everything to the address noted in your 1040 instruction booklet.
Other IRS 433 Forms
Form 433-F is not the only form in this series. The IRS also uses Form 433-A (Collection Information Statement for Wage Earners and Self-Employed Individuals) and Form 433-B (Collection Information Statement for Businesses). These forms request a lot more detail than Form 433-F.
If you request an Offer in Compromise or a Partial Payment Installment Agreement, the IRS will typically require you to submit Forms 433-A and/or 433-B.
Get Help With Form 433-F
If you need help filing Form 433-F, requesting a payment plan, or negotiating other arrangements with the IRS, we can help. At the W Tax Group, we specialize in helping people resolve their IRS and state tax problems. To learn more and to talk about the best options for your situation, contact us today.