Form 433-F: Collection Information Statement

In hot water with the IRS? Don’t panic. If you owe IRS back taxes, finding your way out of liability may not be as impossible as it seems. The United States federal government has created ways for taxpayers to resolve their outstanding obligations and clear their name from collections.

Before figuring out which back tax resolution path to take, you’ll need to submit a Form 433-F to the IRS. There are a few differences between the various 433 forms, and you have to file the right one in order to report your financial status. If you’re unsure how to file, or which form to file, we can help. Read on for IRS Form 433-F instructions and start taking steps toward your financial freedom. If there’s a particular section that interests you, skip to it using one of the links below.

What Is IRS Form 433-F?

The IRS Form 433-F Collection Information Sheet is one of the ways the government gathers your personal information to better understand your financial status and evaluate your ability to pay back your tax liability. It requires you to report your full financial history and will be a necessary step to take before calling the IRS Automated Collection System (ACS Unit).

Differences Between Forms 433-A, B, and F

If a local IRS collections revenue officer contacts you regarding your back taxes, they’ll likely request a Form 433-A for personal taxes or Form 433-B for business taxes. Form 433-F, however, will be requested by the agents at the ACS Unit. Revenue officers are the highest level of IRS collection enforcement, and as such, will require the greatest amount of financial disclosures.

Fortunately, IRS Form 433-F is a shorter and simpler way to report your information than its other variations; it has fewer questions, less pages, and is generally easier to fill out. Submit a Form 433-F to negotiate with the agents in the ACS call centers and receive a more affordable solution for your outstanding tax liability.

Who Should File Form 433-F?

You only need to file IRS Form 433-F if you have delinquent taxes. Delinquent taxes are any form of taxes owed to the IRS—the taxes are considered delinquent once the due date for payment passes and the taxes remain unpaid. If you don’t attend to your delinquent tax liability, you may face monetary penalties or other legal ramifications. 

If you do in fact have delinquent tax liability, then Form 433-F can be used when applying for uncollectible status. Uncollectible status is a designation that can be applied in special circumstances and it allows you to remain in compliance as a taxpayer without facing collections enforcement. You may also be required to fill out Form 433-F if you’re in the process of setting up a payment plan for your tax dues with the IRS.

Understanding Your Collection Information

While it’s going to take some time and effort to accurately fill out, Form 433-F is a relatively short and simple document. Just follow the Form 433-F instructions listed on the document itself and answer every section as honestly and completely as you can.

However, there are two things that you should have a general understanding of before completing IRS Form 433-F: National Standards and allowances. Put simply, these are the maximum amounts of money the IRS expects you to be spending in order to stay on track with repaying your tax liability. Below, we’ll take a closer look at what, exactly, we mean when we discuss National Standards and allowances as they relate to Form 433-F.

What Are the Form 433-F National Standards?

“National Standards” (or IRS Collection Financial Standards) allow taxpayers with liabilities to claim a certain amount for necessary expenses based on national—versus local—averages. Report your 433-F National Standards to the IRS to improve your chances of qualifying for tax relief programs; they’ll consider this number when deliberating your payment potential and reduce it from your amount of income. The government created five categories for 433-F National Standards:

  • Food (total expenditures for food from grocery stores, restaurants, etc.)
  • Housekeeping supplies (laundry and cleaning supplies, postage, delivery services)
  • Apparel and services (clothing, footwear, dry cleaning, jewelry)
  • Personal care products and services (hair care, oral hygiene, cosmetics)
  • Miscellaneous (credit card payments, bank fees, school supplies)

Taxpayers will be automatically allowed the total National Standards monthly amount according to their family size, without being questioned as to how much was actually spent. However, if you claim more than the 433-F National Standards, they’ll ask for supporting documents to substantiate those expenses.

For example, as of 2020, a family of four could claim $1,740 for food, clothing, and other items, but a figure exceeding that amount would need to be substantiated with documentation that proves the costs included in the total are necessary living expenses.

What Are the IRS Form 433-F Allowances?

In addition to the National Standards, Form 433-F allowances include out-of-pocket medical expenses such as prescription drugs and eyeglasses. Your necessary living expenses will be grouped together when calculating your repayment of delinquent taxes. The IRS will consider allowable expenses for the health and welfare of you and your family, the cost of living in your area, the size of your family, your monthly income, and any assets you might own.

If you owe taxes and cannot pay, filing Form 433-F allowances is absolutely critical. However, in some cases, these numbers can be tricky to calculate. To get it right the first time, it may be in your best interest to contact a tax professional who can figure out the best repayment structure possible for you.

How Do I File Form 433-F?

In this section, we’ll go over the different sections of Form 433-F. The document is split up into eight distinct sections that cover your accounts, real estate, assets, credit cards, business details, employment status, household income, and necessary living expenses. To make it easier to understand, let’s break Form 433-F down section by section.

Section A: Accounts and lines of credit

The first section requires you to list information regarding your personal bank accounts and investments. Include checking accounts, savings accounts, money market accounts, IRA and 401(k) plans, as well as stocks, bonds, and other investments. There’s even space for you to list any cryptocurrencies you are invested in, such as Bitcoin or Ethereum.

Section B: Real estate

Here you’ll list financial details concerning all of the property you own. This includes your primary home, vacation homes, timeshares, and any other real estate investments you may have.

Section C: Other assets

Your other assets encompass things like vehicles, life insurance policies, and, if applicable, business assets. Make sure to list all of the vehicles you own, including cars, boats, and other recreational vehicles.

Section D: Credit cards

This section provides a space for you to list any and all credit cards in your name.

Section E: Business information

If you’re not a business owner, you don’t have to worry about this section. However, if you are a business owner, you’ll have to list out accounts receivable owed to you or your business as well as your business credit cards and accounts.

Section F: Employment information

In this section, you’ll have to list all of your relevant employment information. This means writing down your current employer, the frequency with which you are paid, the amount you make pre- and post-tax each pay period, and the length of time you’ve been with your current employer. If you have more than one employer, write down their information on a separate sheet of paper. Also keep in mind that if you have a spouse, you’ll have to list their employment information as well.

Section G: Non-wage household income

Non-wage household income includes any income streams that you have outside of a traditional salary or hourly job. This includes things like self-employment income, rental income, unemployment income, Social Security income, and more.

Section H: Monthly necessary living expenses

This is where the National Standards that we detailed in the above section comes into play. The IRS requires you to list all of your monthly living expenses, divided up into five broad categories: food/personal care, transportation, housing & utilities, medical, and other. Remember that if the number you list exceeds the amount allowed by the IRS, you will likely be required to provide documentation that proves the costs that exceed the allowable amount are necessary living expenses.

Where Do I Send IRS Form 433-F?

You’ll never meet face to face with an ACS representative, so you will need to submit your document via mail to the IRS Form 433-F mailing address. Your designated location is specific to the state in which you live, and you can find your assigned IRS Form 433-F mailing address on their website at IRS.gov.

IRS Form 433-F Tips

To settle your case with the federal government, you’ll need to correctly fill out and submit the IRS Form 433-F. Any misreporting will delay the closing of your case, and could lead you to incur more penalties and late fees. We’ve compiled some essential tips to guide you through filing your IRS Form 433-F so you can feel more confident about your report.

  • Complete every line, even the ones you don’t feel apply to you. Answer those questions with “none” or “not applicable (NA)” to avoid any miscommunication; any empty boxes may be considered a mistake on your part, not a deliberate pass.
  • Include your necessary expenses. When you’re reporting your financial status, the IRS might determine you need to pay an exorbitant monthly rate toward your outstanding taxes if you fail to report your allowances.
  • Check to see if you’re able to establish an Online Payment Agreement prior to submitting an IRS Form 433-F. Keep in mind that this form essentially hands a pocket map of your financials over to the government, which could then be used against you in liens and levies. Setting up a payment system online can help protect your personal information.

Takeaways

If you owe back taxes to the IRS, it’s critical to understand that IRS Form 433-F will likely determine the fate of your delinquent tax liability case with the federal government. The agents at the ACS Unit will use the form to determine whether you’re able to pay your outstanding taxes, and if so, will decide how you’ll pay it off. They may implement an Installment Agreement or label you with an uncollectible status.

To get professional assistance in filling out Form 433-F and come up with an affordable payment plan for your back taxes, hire the help of trusted experts at Community Tax. We’ll file the IRS Form 433-F on your behalf, so you can sit back and rest easy knowing you’re on your way to clearing your name from the IRS’ radar and making progress towards settling your tax dues.

Give us a call today at (844) 328-5857 to schedule a free tax consultation and start improving your financial well-being.

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