Jump Links
The IRS 433-A (OIC) form plays a crucial role for individuals seeking to settle tax debts through an Offer in Compromise (OIC). This form requires detailed information about your financial situation, including income, expenses, and assets. By filling out the 433-A (OIC), you provide the IRS with a clear picture of your ability to pay your tax liabilities. This form is essential for taxpayers who may not have the means to pay their full tax debt but still want to resolve their obligations. It helps the IRS determine if you qualify for an agreement that allows you to pay less than what you owe under certain circumstances. Understanding how to accurately complete this form can make a significant difference in your chances of a favorable resolution with the IRS. Gathering the necessary documentation and thoughtfully considering your financial details will ensure you are well-prepared to submit a compelling offer.
IRS 433-A (OIC) Example
Form
(April 2020)
Department of the Treasury — Internal Revenue Service
Collection Information Statement for Wage Earners and
Use this form if you are
►An individual who owes income tax on a Form 1040, U.S. Individual Income Tax Return
►An individual with a personal liability for Excise Tax
►An individual responsible for a Trust Fund Recovery Penalty
►An individual who is
►An individual who is personally responsible for a partnership liability (only if the partnership is submitting an offer)
►An individual who operated as a disregarded single member Limited Liability Company (LLC) taxed as a sole proprietor prior to 2009
►An individual who is submitting an offer on behalf of the estate of a deceased person
Note: Include attachments if additional space is needed to respond completely to any question. This form should only be used with the Form 656, Offer in Compromise.
Section 1 |
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Personal and Household Information |
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Last name |
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First name |
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Date of birth (mm/dd/yyyy) |
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Social Security Number |
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Marital status |
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Home physical address (street, city, state, ZIP code) |
Do you |
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Unmarried |
Married |
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Own your home |
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Rent |
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If married, date of marriage (mm/dd/yyyy) |
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Other (specify e.g., share rent, live with relative, etc.) |
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County of residence |
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Primary phone |
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Home mailing address (if different from above or post office box number) |
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Secondary phone |
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FAX number |
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Provide information about your spouse. |
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Spouse's last name |
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Spouse's first name |
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Date of birth (mm/dd/yyyy) |
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Social Security Number |
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Provide information for all other persons in the household or claimed as a dependent. |
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Name |
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Age |
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Relationship |
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Claimed as a dependent |
Contributes to |
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on your Form 1040 |
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household income |
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Yes |
No |
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Yes |
No |
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Yes |
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Yes |
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Yes |
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Yes |
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Yes |
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Section 2 |
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Employment Information for Wage Earners |
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Complete this section if you or your spouse are wage earners and receive a Form
Your employer’s name |
Pay period |
Weekly |
Employer’s address (street, city, state, ZIP code) |
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Monthly |
Other |
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Do you have an ownership interest in this |
If yes, check the business interest that applies |
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business |
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Partner |
Sole proprietor |
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Yes |
No |
Officer (complete Form |
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Your occupation |
How long with this employer |
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(years) |
(months) |
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Spouse’s employer's name |
Pay period |
Weekly |
Employer’s address (street, city, state, ZIP code) |
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Monthly |
Other |
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Does your spouse have an ownership |
If yes, check the business interest that applies |
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interest in this business |
Partner |
Sole proprietor |
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Yes |
No |
Officer (complete Form |
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Spouse's occupation |
How long with this employer |
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(years) |
(months) |
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Catalog Number 55896Q |
www.irs.gov |
Form |
Page 2
Section 3 |
Personal Asset Information |
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Use the most current statement for each type of account, such as checking, savings, money market and online accounts, stored value cards (such as a payroll card from an employer), investment, retirement accounts (IRAs, Keogh, 401(k) plans, stocks, bonds, mutual funds, certificates of deposit) and virtual currency (such as Bitcoin, Ripple, Ethereum, etc.), life insurance policies that have a cash value, and safe deposit boxes. Asset value is subject to adjustment by IRS based on individual circumstances. Enter the total amount available for each of the following (if additional space is needed include attachments).
Round to the nearest dollar. Do not enter a negative number. If any line item is a negative number, enter "0".
Cash and Investments (domestic and foreign)
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Cash |
Checking |
Savings |
Money Market Account/CD |
Online Account |
Stored Value Card |
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Bank name |
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Account number |
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(1a) |
$ |
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Checking |
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Savings |
Money Market Account/CD |
Online Account |
Stored Value Card |
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Bank name |
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Account number |
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(1b) |
$ |
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Total of bank accounts from attachment |
(1c) |
$ |
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Add lines (1a) through (1c) minus ($1,000) = |
(1) |
$ |
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Investment account |
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Stocks |
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Bonds |
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Other |
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Name of Financial Institution |
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Account number |
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Current market value |
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Minus loan balance |
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$ |
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X .8 = $ |
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– $ |
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= |
(2a) |
$ |
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Investment account |
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Stocks |
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Bonds |
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Other |
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Name of Financial Institution |
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Account number |
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Current market value |
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Minus loan balance |
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$ |
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X .8 = $ |
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– $ |
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= |
(2b) |
$ |
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Virtual currency |
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Name of virtual currency |
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Email address used to |
Location(s) of virtual |
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wallet, exchange or digital |
currency |
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Type of virtual currency |
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currency exchange (DCE) |
currency exchange or DCE |
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Current market value in U.S. dollars as of today |
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$ |
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X .8 = $ |
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= |
(2c) |
$ |
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Total investment accounts from attachment. [current market value minus loan balance(s)] |
(2d) |
$ |
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Add lines (2a) through (2d) =
(2) $
Retirement account |
401K |
IRA |
Other |
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Name of Financial Institution |
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Account number |
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Current market value |
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Minus loan balance |
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$ |
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X .8 = $ |
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– $ |
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(3a) |
$ |
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Total of retirement accounts from attachment. [current market value X .8 minus loan balance(s)] |
(3b) |
$ |
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Add lines (3a) through (3b) =
(3) $
Note: Your reduction from current market value may be greater than 20% due to potential tax consequences/withdrawal penalties.
Cash value of Life Insurance Policies |
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Name of Insurance Company |
Policy number |
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Current cash value |
Minus loan balance |
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$ |
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– $ |
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(4a) |
$ |
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Total cash value of life insurance policies from attachment |
Minus loan balance(s) |
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$ |
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– $ |
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(4b) |
$ |
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Add lines (4a) through (4b) = |
(4) |
$ |
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Catalog Number 55896Q |
www.irs.gov |
Form |
Page 3
Section 3 (Continued) |
Personal Asset Information |
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Real property (enter information about any house, condo,
Is your real property currently for sale or do you anticipate selling your real property to fund the offer amount
Yes |
(listing price) |
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No |
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Property description (indicate if personal residence) |
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Purchase/Lease date (mm/dd/yyyy) |
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Amount of mortgage/rent payment
Date of final payment
How title is held (joint tenancy, etc.)
Location (street, city, state, ZIP code, county, and country)
Lender/Lessor/Landlord name, address (street, city, state, ZIP code) and phone
Current market value |
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Minus loan balance (mortgages, etc.) |
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$ |
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X .8 = $ |
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– $ |
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(total value of real estate) = |
(5a) |
$ |
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Property description (indicate if rental property, vacant, etc.) |
Purchase/Lease date (mm/dd/yyyy) |
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Amount of mortgage/rent payment
Date of final payment
How title is held (joint tenancy, etc.)
Location (street, city, state, ZIP code, county, and country)
Lender/Lessor/Landlord name, address (street, city, state, ZIP code) and phone
Current market value |
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Minus loan balance (mortgages, etc.) |
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X .8 = $ |
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– $ |
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(total value of real estate) = |
(5b) |
$ |
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Total value of property(s) from attachment [current market value X .8 |
minus any loan balance(s)] |
(5c) |
$ |
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Add lines (5a) through (5c) =
(5) $
Vehicles (enter information about any cars, boats, motorcycles, etc. that you own or lease)
Vehicle make & model |
Year |
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Date purchased |
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Mileage |
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Lease |
Name of creditor |
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Date of final payment |
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Monthly lease/loan amount |
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Loan |
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$ |
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Current market value |
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Minus loan balance |
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X .8 = $ |
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– $ |
Total value of vehicle (if the vehicle |
(6a) |
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is leased, enter 0 as the total value) = |
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Subtract $3,450 from line (6a) |
(6b) |
$ |
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(If line (6a) minus $3,450 is a negative number, enter "0") |
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Vehicle make & model |
Year |
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Date purchased |
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Mileage |
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Lease |
Name of creditor |
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Date of final payment |
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Monthly lease/loan amount |
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Loan |
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$ |
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Current market value |
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Minus loan balance |
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$ |
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X .8 = $ |
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– $ |
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Total value of vehicle (if the vehicle |
(6c) |
$ |
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is leased, enter 0 as the total value) = |
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If you are filing a joint offer, subtract $3,450 from line (6c) |
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(If line (6c) minus $3,450 is a negative number, enter "0") |
(6d) |
$ |
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If you are not filing a joint offer, enter the amount from line (6c) |
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Total value of vehicles listed from attachment [current market value X .8 minus any loan balance(s)]
(6e) $
Total lines (6b), (6d), and (6e) =
(6) $
Catalog Number 55896Q |
www.irs.gov |
Form |
Page 4
Section 3 (Continued) |
Personal Asset Information |
Other valuable items (artwork, collections, jewelry, items of value in safe deposit boxes, interest in a company or business that is not publicly traded, etc.)
Description of asset(s)
Current market value |
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Minus loan balance |
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$ |
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X .8 = $ |
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– $ |
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= |
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(7a) |
$ |
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Value of remaining furniture and personal effects (not listed above) |
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Description of asset |
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Current market value |
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Minus loan balance |
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X .8 = $ |
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– $ |
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(7b) |
$ |
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Total value of valuable items listed from attachment [current market value X .8 |
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minus any loan balance(s)] |
(7c) |
$ |
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Add lines (7a) through (7c) minus IRS deduction of $9,690 = |
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Do not include amount on the lines with a letter beside the number. Round to the nearest whole dollar. |
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Box A |
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Do not enter a negative number. If any line item is a negative, enter "0" on that line. |
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Available Individual Equity in Assets |
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$ |
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Add lines (1) through (7) and enter the amount in Box A = |
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NOTE: If you or your spouse are |
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Section 4 |
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If you or your spouse are |
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Is your business a sole proprietorship |
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Address of business (if other than personal residence) |
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Yes |
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No |
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Name of business |
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Business telephone number |
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Employer Identification Number |
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Business website address |
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Trade name or DBA |
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( |
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- |
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Description of business |
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Total number of employees |
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Frequency of tax deposits |
Average gross monthly |
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payroll $ |
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Do you or your spouse have any other |
business interests? Include any |
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Business address (street, city, state, ZIP code) |
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interest in an LLC, LLP, corporation, partnership, etc. |
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Yes |
(percentage of ownership: |
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) Title |
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No |
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Business name |
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Business telephone number |
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Employer Identification Number |
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( |
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- |
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Type of business (select one) |
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Partnership |
LLC |
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Corporation |
Other |
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Section 5 |
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Business Asset Information (for |
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List business assets such as bank accounts, virtual currency (cryptocurrency), tools, books, machinery, equipment, business vehicles and real property that is owned/leased/rented. If additional space is needed, attach a list of items. Do not include personal assets listed in Section 3.
Round to the nearest whole dollar. Do not enter a negative number. If any line item is a negative number, enter "0".
|
Cash |
Checking |
Savings |
Money Market Account/CD |
Online Account |
Stored Value Card |
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Bank name |
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Account number |
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(8a) |
$ |
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Cash |
Checking |
Savings |
Money Market Account/CD |
Online Account |
Stored Value Card |
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Bank name |
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Account number |
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(8b) |
$ |
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Virtual currency |
Name of virtual currency |
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Email address used to |
Location(s) of virtual |
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wallet, exchange or digital |
currency |
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Type of virtual currency |
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currency exchange (DCE) |
currency exchange or DCE |
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Current market value in U.S. dollars as of today |
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$ |
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X .8 = $ |
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= |
(8c) |
$ |
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Total bank accounts from attachment |
(8d) |
$ |
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Add lines (8a) through (8d) =
(8) $
Catalog Number 55896Q |
www.irs.gov |
Form |
Page 5
Section 5 (Continued) |
Business Asset Information (for |
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Description of asset |
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Current market value |
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Minus loan balance |
Total value (if leased or used |
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$ |
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X .8 = $ |
|
– $ |
|
in the production of income, |
= |
(9a) |
$ |
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enter 0 as the total value) |
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Description of asset: |
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Current market value |
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Minus Loan Balance |
Total value (if leased or used |
|
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$ |
|
X .8 = $ |
|
– $ |
|
in the production of income, |
= |
(9b) |
$ |
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|
enter 0 as the total value) |
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Total value of assets listed from attachment [current market value X .8 minus any loan balance(s)] |
(9c) |
$ |
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Add lines (9a) through (9c) =
(9) $
IRS allowed deduction for professional books and tools of trade –
(10) $ [4,850]
Enter the value of line (9) minus line (10). If less than zero enter zero. = |
(11) $ |
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Notes Receivable |
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Do you have notes receivable |
Yes |
No |
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If yes, attach current listing that includes name(s) and amount of note(s) receivable |
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Accounts Receivable |
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Do you have accounts receivable, including |
Yes |
No |
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companies, and any bartering or online auction accounts |
|
||||
If yes, you may be asked to provide a list of your account(s) receivable |
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Do not include amounts from the lines with a letter beside the number [for example: (9c)]. |
Box B |
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|
Round to the nearest whole dollar. |
Available Business Equity in |
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Do not enter a negative number. If any line item is a negative, enter "0" on that line. |
Assets |
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Add lines (8) and (11) and enter the amount in Box B = |
$ |
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Section 6 |
Business Income and Expense Information (for |
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|||
If you provide a current profit and loss (P&L) statement for the information below, enter the total gross monthly income on line 17 and your monthly expenses on line 29 below. Do not complete lines (12) - (16) and (18) - (28). You may use the amounts claimed for income and expenses on your most recent Schedule C; however, if the amount has changed significantly within the past year, a current P&L should be submitted to substantiate the claim.
Round to the nearest whole dollar. Do not enter a negative number. If any line item is a negative number, enter "0".
Business income (you may average
Gross receipts |
(12) |
$ |
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Gross rental income |
(13) |
$ |
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Interest income |
(14) |
$ |
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Dividends |
(15) |
$ |
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Other income |
(16) |
$ |
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Add lines (12) through (16) = |
(17) |
$ |
Business expenses (you may average |
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Materials purchased (e.g., items directly related to the production of a product or service) |
(18) |
$ |
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Inventory purchased (e.g., goods bought for resale) |
(19) |
$ |
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Gross wages and salaries |
(20) |
$ |
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Rent |
(21) |
$ |
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Supplies (items used to conduct business and used up within one year, e.g., books, office supplies, professional equipment, etc.) |
(22) |
$ |
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Utilities/telephones |
(23) |
$ |
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Vehicle costs (gas, oil, repairs, maintenance) |
(24) |
$ |
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Business insurance |
(25) |
$ |
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Current business taxes (e.g., real estate, excise, franchise, occupational, personal property, sales and employer's portion of |
(26) |
$ |
employment taxes) |
||
Secured debts (not credit cards) |
(27) |
$ |
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Other business expenses (include a list) |
(28) |
$ |
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Add lines (18) through (28) = |
(29) |
$ |
Round to the nearest whole dollar. |
Box C |
|
Do not enter a negative number. If any line item is a negative, enter "0" on that line. |
Net Business Income |
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Subtract line (29) from line (17) and enter the amount in Box C = |
$ |
|
Catalog Number 55896Q |
www.irs.gov |
Form |
Page 6
Section 7 |
Monthly Household Income and Expense Information |
Enter your household's gross monthly income. Gross monthly income includes wages, social security, pension, unemployment, and other income. Examples of other income include but are not limited to: agricultural subsidies, gambling income, oil credits, rent subsidies, Uber & Lyft driver income, and Airbnb rentals etc. The information below is for yourself, your spouse, and anyone else who contributes to your household's income. The entire household includes spouse,
Monthly Household Income
Note: Entire household income should also include income that is considered not taxable and may not be included on your tax return.
Round to the nearest whole dollar.
Primary taxpayer |
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Gross wages |
Social Security |
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Pension(s) |
Other income (e.g. unemployment) |
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$ |
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+ $ |
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+ $ |
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+ $ |
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Total primary |
(30) |
$ |
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taxpayer income = |
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Spouse |
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Gross wages |
Social Security |
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Pension(s) |
Other Income (e.g. unemployment) |
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$ |
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+ $ |
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+ $ |
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+ $ |
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Total spouse |
(31) |
$ |
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income = |
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Additional sources of income used to support the household, e.g., |
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contribute to the household income, etc. List source(s) |
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(32) |
$ |
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Interest, dividends, and royalties |
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(33) |
$ |
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Distributions (e.g., income from partnerships, |
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(34) |
$ |
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Net rental income |
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(35) |
$ |
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Net business income from Box C |
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(36) |
$ |
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Child support received |
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(37) |
$ |
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Alimony received |
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(38) |
$ |
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Round to the nearest whole dollar. |
Box D |
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Total Household Income |
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|
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|
Do not enter a negative number. If any line item is a negative, enter "0" on that line. |
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|
|
|
$ |
|
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|
Add lines (30) through (38) and enter the amount in Box D = |
|
||||||||
Monthly Household Expenses
Enter your average monthly expenses.
Note: For expenses claimed in boxes (39) and (45) only, you should list the full amount of the allowable standard even if the actual amount you pay is less. For the other boxes input your actual expenses. You may find the allowable standards at
|
|
|
|
Round to the nearest whole dollar. |
|
Food, clothing, and miscellaneous (e.g., housekeeping supplies, personal care products , minimum payment on credit card). |
|
(39) |
$ |
||
A reasonable estimate of these expenses may be used |
|
||||
Housing and utilities (e.g., rent or mortgage payment and average monthly cost of property taxes, home insurance, |
|
|
|
||
maintenance, dues, fees and utilities including electricity, gas, other fuels, trash collection, water, cable television and internet, |
|
|
|
||
telephone, and cell phone) |
|
(40) |
$ |
||
Vehicle loan and/or lease payment(s) |
|
(41) |
$ |
||
|
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|
Vehicle operating costs (e.g., average monthly cost of maintenance, repairs, insurance, fuel, registrations, licenses, |
|
(42) |
$ |
||
inspections, parking, tolls, etc.). A reasonable estimate of these expenses may be used |
|
||||
Public transportation costs (e.g., average monthly cost of fares for mass transit such as bus, train, ferry, taxi, etc.). A |
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|
||
reasonable estimate of these expenses may be used |
|
(43) |
$ |
||
Health insurance premiums |
|
(44) |
$ |
||
|
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|
(45) |
$ |
|||
eyeglasses, hearing aids, etc.) |
|
||||
|
(46) |
$ |
|||
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|
Child/dependent care payments (e.g., daycare, etc.) |
|
(47) |
$ |
||
|
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|
Term life insurance premiums |
|
(48) |
$ |
||
|
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|
Current monthly taxes (e.g., monthly cost of federal, state, and local tax, personal property tax, etc.) |
|
(49) |
$ |
||
|
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|
Secured debts/Other (e.g., any loan where you pledged an asset as collateral not previously listed, government guaranteed |
|
|
|
||
student loan) List debt(s) |
|
(50) |
$ |
||
|
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|
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|
Enter the amount of your monthly delinquent state and/or local tax payment(s) . Total tax owed |
|
|
(51) |
$ |
|
|
|
|
|
||
|
Round to the nearest whole dollar. |
|
Box E |
||
|
Do not enter a negative number. If any line item is a negative, enter "0" on that line. |
|
Total Household Expenses |
||
|
Add lines (39) through (51) and enter the amount in Box E = |
|
$ |
|
|
|
Round to the nearest whole dollar. |
|
Box F |
||
|
Do not enter a negative number. If any line item is a negative, enter "0" on that line. |
|
Remaining Monthly Income |
||
|
Subtract Box E from Box D and enter the amount in Box F = |
|
$ |
|
|
Catalog Number 55896Q |
www.irs.gov |
Form |
Page 7
Section 8 |
Calculate Your Minimum Offer Amount |
The next steps calculate your minimum offer amount. The amount of time you take to pay your offer in full will affect your minimum offer amount. Paying over a shorter period of time will result in a smaller minimum offer amount.
Note: The multipliers below (12 and 24) and the calculated offer amount (which included the amount(s) allowed for vehicles and bank accounts) do not apply if the IRS determines you have the ability to pay your tax debt in full within the legal period to collect.
Round to the nearest whole dollar.
If you will pay your offer in 5 or fewer payments within 5 months or less, multiply "Remaining Monthly Income" (Box F) by 12 to get "Future Remaining Income" (Box G). Do not enter a number less than $0.
Enter the total from Box F
$
X 12 =
Box G Future Remaining Income
$
If you will pay your offer in 6 to 24 months, multiply "Remaining Monthly Income" (Box F) by 24 to get "Future Remaining Income" (Box H). Do not enter a number less than $0.
Enter the total from Box F
$
X 24 =
Box H Future Remaining Income
$
Determine your minimum offer amount by adding the total available assets from Box A and Box B (if applicable) to the amount in either Box G or Box H.
Enter the amount from Box A plus Box B (if applicable)
$
+
Enter the amount from either Box G or Box H
$
=
Offer Amount
Your offer must be more than zero ($0). Do not leave blank. Use whole dollars only.
$
If you cannot pay the Offer Amount shown above due to special circumstances, explain on the Form 656, Offer in Compromise, Section 3, Reason for Offer, Explanation of Circumstances. You must offer an amount more than $0.
Section 9 |
Other Information |
Additional information IRS needs to consider settlement of your tax debt. If you or your business are currently in a bankruptcy proceeding, you are not eligible to apply for an offer.
Are you a party to or involved in litigation (if yes, answer the following) |
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Location of filing |
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Amount of dispute |
Possible completion date (mmddyyyy) |
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Subject of litigation |
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Have you filed bankruptcy in the past 7 years (if yes, answer the following) |
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Date dismissed (mmddyyyy) |
Date discharged (mmddyyyy) |
Petition no. |
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In the past 10 years, have you lived outside of the U.S. for 6 months or longer (if yes, answer the following) |
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Dates lived abroad: From (mmddyyyy) |
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Are you or have you ever been party to any litigation involving the IRS/United States (including any tax litigation) |
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If yes and the litigation included tax debt, provide the types of tax and periods involved |
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Are you the beneficiary of a trust, estate, or life insurance policy (if yes, answer the following) |
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Place where recorded |
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EIN |
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Name of the trust, estate, or policy |
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Anticipated amount to be received |
When will the amount be received |
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Are you a trustee, fiduciary, or contributor of a trust |
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Name of the trust |
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Do you have a safe deposit box (business or personal) (if yes, answer the following) |
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Location (name, address and box number(s)) |
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Contents |
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In the past 10 years, have you transferred any assets, including real property, for less than their full value (if yes, answer the
following)
Yes
No
List asset(s)
Value at time of transfer
$
Date transferred (mmddyyyy)
To whom or where was it transferred
Catalog Number 55896Q |
www.irs.gov |
Form |
Page 8
Section 9 (Continued)Other Information
Do you have any assets or own any real property outside the U.S.
If yes, provide description, location, and value
Do you have any funds being held in trust by a third party
If yes, how much $ |
Where |
Section 10 |
Signatures |
Yes 
No
Yes 
No
Under penalties of perjury, I declare that I have examined this offer, including accompanying documents, and to the best of my knowledge it is true, correct, and complete.
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►Signature of Taxpayer |
Date (mm/dd/yyyy) |
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►Signature of Spouse |
Date (mm/dd/yyyy) |
Remember to include all applicable attachments listed below. |
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Copies of the most recent pay stub, earnings statement, etc., from each employer.
Copies of the most recent statement for each investment and retirement account.
Copies of the most recent statement, etc., from all other sources of income such as pensions, Social Security, rental income, interest and dividends (including any received from a related partnership, corporation, LLC, LLP, etc.), court order for child support, alimony, royalties, and rent subsidies.
Copies of individual bank statements for the three most recent months. If you operate a business, copies of the six most recent statements for each business bank account.
Copies of the most recent statement from lender(s) on loans such as mortgages, second mortgages, vehicles, etc., showing monthly payments, loan payoffs, and balances.
List of Notes Receivable, if applicable.
Verification of delinquent State/Local Tax Liability showing total delinquent state/local taxes and amount of monthly payments, if applicable.
Documentation to support any special circumstances described in the “Explanation of Circumstances” on Form 656, if applicable.
Attach a Form 2848, Power of Attorney, if you would like your attorney, CPA, or enrolled agent to represent you and you do not have a current form on file with the IRS.
Completed and signed current Form 656.
Catalog Number 55896Q |
www.irs.gov |
Form |
File Breakdown
| Fact Name | Description |
|---|---|
| Purpose | The IRS 433-A (OIC) form is used to provide the IRS with detailed financial information required to evaluate an Offer in Compromise (OIC) request. |
| Who Should Use It? | Individuals seeking to settle their tax debt for less than the full amount owed can use this form. |
| Required Information | It requires information about income, expenses, assets, and liabilities to help the IRS understand your financial situation. |
| Submission Timing | Submit this form along with your Offer in Compromise application, including Form 656. |
| State-Specific Needs | Some states may require additional forms or information, depending on local regulations. |
| Governing Laws | In addition to federal law governing offers in compromise, certain states have specific requirements that must be met according to their tax codes. |
| Payment Options | You must select your payment options on the IRS 433-A (OIC), as this can affect the acceptance of your offer. |
Guide to Using IRS 433-A (OIC)
Filling out the IRS 433-A (OIC) form is an essential step for individuals considering an offer in compromise. This document requires detailed financial information, so it's crucial to approach it with care and accuracy. Once completed, this form will help the IRS evaluate your ability to pay and determine if an offer in compromise is feasible.
- Gather necessary documents: Collect all relevant financial documents, including pay stubs, bank statements, and property valuations.
- Personal information: Fill out your name, address, Social Security number, and other personal details in the designated sections of the form.
- Income section: List all sources of income, providing details on amount and frequency. Include income from employment, self-employment, rental properties, or other sources.
- Expenses section: Detail your necessary monthly expenses, such as housing, utilities, food, transportation, and healthcare costs. Be thorough and honest.
- Asset information: Describe your assets, including bank accounts, real estate, vehicles, and personal property. Provide current market values for these assets.
- Liabilities section: List any debts or obligations, such as loans, credit card balances, and any other liabilities that might affect your financial situation.
- Sign and date: Once the form is completely filled out, sign and date it at the end of the document to certify the information provided is true and accurate.
After completing the IRS 433-A (OIC) form, review it carefully for any errors or omissions. A complete and accurate submission can greatly impact the processing time and the outcome of your offer in compromise.
Get Answers on IRS 433-A (OIC)
What is the IRS 433-A (OIC) form?
The IRS 433-A (OIC) form is a collection information statement that individuals use when applying for an Offer in Compromise (OIC) with the IRS. This form provides detailed financial information, allowing the IRS to assess your ability to pay your tax liabilities. Completing it accurately is essential for your application to be considered.
Who needs to fill out the IRS 433-A (OIC) form?
This form is required for individuals who are seeking to settle their tax debt for less than the full amount owed. If you believe you cannot pay your tax bill in full due to financial hardship, you will likely need to fill out this form as part of your application process.
What information must I provide on the IRS 433-A (OIC) form?
You will need to provide detailed information about your financial situation, including:
- Personal information, such as your name, address, and Social Security number.
- Income details, including wages, self-employment earnings, and any other sources of income.
- Expenses, including housing, utilities, food, transportation, and medical costs.
- Assets, such as bank accounts, vehicles, real estate, and retirement accounts.
How is the IRS 433-A (OIC) form submitted?
The completed IRS 433-A (OIC) form should be submitted along with your Offer in Compromise application. It can be sent by mail or electronically, depending on the guidelines provided by the IRS. Ensure that you keep copies of all documents submitted for your records.
What happens after I submit the IRS 433-A (OIC) form?
Once the IRS receives your application, they will review the submitted information to determine whether you qualify for an OIC. This process may take several months. You may receive requests for additional information, so it is crucial to respond promptly to avoid delays.
Can I get help filling out the IRS 433-A (OIC) form?
Yes, you may seek help from a tax professional, such as a certified public accountant or an attorney who specializes in tax law. They can assist you in gathering the required information and ensure that your form is completed accurately. This can greatly improve your chances of a successful application.
What if the IRS denies my Offer in Compromise?
If your Offer in Compromise is denied, the IRS will provide you with a written explanation. You may appeal the decision within 30 days of the notice. Alternatively, you can consider other options for resolving your tax debt, such as a payment plan or other forms of relief.
Is there a fee to submit the IRS 433-A (OIC) form?
There is a non-refundable application fee for submitting your Offer in Compromise, which varies based on your financial situation. However, if you meet certain low-income criteria, you may be eligible for a fee waiver. Be sure to check the current fee structure on the IRS website or consult a tax professional for assistance.
How long does it take for the IRS to process my 433-A (OIC) form?
The processing time for an Offer in Compromise can vary widely, typically ranging from 6 months to a year. Factors influencing this timeline include the complexity of your financial situation and how promptly you respond to any additional requests from the IRS.
Common mistakes
Filling out the IRS 433-A (OIC) form can be a complex process. Many individuals make critical mistakes that can jeopardize their offer in compromise. Understanding these common pitfalls can help ensure a smoother submission process.
One frequent mistake is incomplete information. Applicants often overlook sections of the form, leaving out crucial details about their financial situation. Every piece of information counts when the IRS assesses your ability to pay. Missing data can lead to delays or outright rejections.
Another error involves underreporting income. People sometimes fail to include all sources of income or do not accurately calculate their total earnings. The IRS requires a complete picture of your financial circumstances. Discrepancies can raise red flags and affect your offer's viability.
Improper documentation is also a significant issue. Submitting the form without the necessary supporting documents can slow down the review process. Applicants should include all relevant financial documents, such as recent pay stubs and bank statements, to support their claims. Missing documentation can lead to additional questions and potential denial.
Some individuals miscalculate their expenses. Providing inflated or unrealistic expenses can harm your credibility. Ensure that all claimed expenses are reasonable and accurately documented. The IRS expects a true reflection of your necessary living costs, so being honest is vital.
Finally, many people overlook the importance of signing and dating the form. A lack of signature can result in the IRS deeming the application invalid. Always double-check that all required sections are completed and signed before submitting your paperwork.
Documents used along the form
When filing the IRS 433-A (OIC) form, you may need to submit several other documents to support your Offer in Compromise (OIC) application. Each document plays a critical role in providing the IRS with a complete picture of your financial situation. Here’s a list of the essential forms and documents often required.
- Form 656: This is the main Offer in Compromise form. You use it to formally make your proposal to the IRS regarding a reduced tax obligation.
- Form 656-L: This form is for a lien offer and helps establish that you are eligible for an Offer in Compromise based on doubt as to liability.
- Form 433-B (OIC): If you're a business owner, this form outlines the financial information of your business, crucial for evaluating your offer.
- Pay Stubs: Recent pay stubs demonstrate your income level, showing how much you earn and helping to assess your ability to pay.
- Bank Statements: These statements provide evidence of your financial history, showcasing your savings and checking accounts' balances and transactions.
- Asset Valuation: Documentation detailing the current value of significant assets such as real estate, vehicles, and investments is necessary to establish your financial worth.
- Proof of Expenses: Itemized statements or receipts proving your monthly living expenses help illustrate your financial situation and justify your offer.
Gathering and submitting these documents along with the IRS 433-A (OIC) form can greatly improve the chances of your offer being accepted. Ensure all information is accurate and complete to avoid delays in processing your application.
Similar forms
The IRS 433-A (OIC) form is used to gather information about a taxpayer's financial situation when they are seeking to settle their tax debt for less than the full amount owed. It is similar to several other forms used in tax situations. Here are four documents that share similarities:
- IRS 433-B (OIC): This form is for businesses seeking an Offer in Compromise (OIC). Like the 433-A, it collects financial details but focuses on business income, expenses, and assets.
- IRS Form 656: This form is used to submit an Offer in Compromise. While 433-A gathers financial information, Form 656 formally proposes the offer to settle tax debt.
- IRS 4506-T: This form allows taxpayers to request a transcript of their tax returns. It provides financial history, similar to how the 433-A provides a clear picture of current finances.
- Form 1040: The individual income tax return captures annual income and deductions. This form provides essential financial details, much like the 433-A outlines a taxpayer's financial status.
Dos and Don'ts
When completing the IRS 433-A (OIC) form, it is important to follow specific guidelines. Here are four essential do's and don'ts to keep in mind:
- Do provide accurate and truthful information throughout the form.
- Do include all sources of income, including wages, freelance work, and other earnings.
- Do attach any necessary documentation that supports your claims.
- Do review your form thoroughly before submission to ensure everything is complete and correct.
- Don't omit any assets or liabilities that may affect your financial situation.
- Don't underestimate your living expenses; provide realistic figures.
- Don't leave any sections blank; answer all questions to the best of your ability.
- Don't ignore deadlines; submit your form promptly to avoid further issues.
Misconceptions
Understanding the IRS 433-A (OIC) form is crucial for those engaging with the IRS regarding an Offer in Compromise. However, many misunderstandings exist about this form and its implications. Here are seven common misconceptions:
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It's only for low-income individuals:
Many believe that only individuals with low incomes can apply for an Offer in Compromise. In reality, anyone who meets specific financial criteria and demonstrates an inability to pay their tax debt can submit this form.
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The form guarantees acceptance:
Some people think that submitting the IRS 433-A (OIC) ensures that their offer will be accepted. However, the IRS evaluates each application on its merits, and many factors influence the decision.
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You can disregard tax debts while applying:
Another misconception is that applicants can ignore certain tax liabilities when submitting their offer. All outstanding tax debts must be included in the application, or it will be deemed incomplete.
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Filing the form halts IRS collection actions:
It's a common belief that submitting the IRS 433-A (OIC) immediately stops all collection actions. While the IRS usually suspends collections during the evaluation process, this is not guaranteed.
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Once the offer is made, it cannot be changed:
Some individuals think that the offer cannot be modified after submission. However, applicants can often amend their offers if circumstances change or if they realize there was an error.
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You need to hire a tax professional to complete the form:
While many find it beneficial to work with a tax professional, it's not a requirement. Individuals can fill out the form themselves, provided they understand the instructions and requirements.
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The IRS 433-A (OIC) does not require supporting documents:
Some may think that submitting the form alone is sufficient. In truth, applicants must provide thorough documentation supporting their financial situation, as the IRS relies on this information to assess the offer.
Understanding these misconceptions can prevent confusion and help individuals navigate the Offer in Compromise process more effectively.
Key takeaways
When dealing with the IRS 433-A (OIC) form, it is essential to understand its purpose and the information required. This form is crucial for those seeking to settle their tax liabilities through an Offer in Compromise (OIC). Here are five key takeaways to consider:
- Complete Accuracy is Vital: Ensure that all information provided is accurate and truthful. Any discrepancies may lead to the rejection of your offer.
- Detail Your Financial Situation: Clearly outline your income, expenses, assets, and liabilities. The IRS uses this information to assess your ability to pay.
- Documentation is Necessary: Support your claims with appropriate documentation. Bank statements, pay stubs, and tax returns can strengthen your case.
- Understand the Review Process: The IRS may take several months to review your submission. Be patient and ready to provide additional information if requested.
- Consult a Professional: Consider seeking advice from a tax professional. Their expertise can help navigate the complexities of the process.
Filling out the IRS 433-A (OIC) form can be daunting, but understanding its components can lead to a successful resolution of your tax issues.