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When individuals find themselves facing financial challenges that make it difficult to meet their tax obligations, the Internal Revenue Service (IRS) provides a pathway for resolution through the 433-A (OIC) form. This document is essential for taxpayers who are considering an Offer in Compromise (OIC), a program that allows them to settle their tax debts for less than the full amount owed. The form aims to give the IRS a detailed view of the applicant's financial situation, including income, expenses, asset equity, and liabilities. By carefully reviewing this information, the IRS assesses whether the taxpayer qualifies for relief, ensuring that the process is fair and accessible to those who genuinely need assistance. Completing the form accurately is crucial, as it plays a significant role in determining the feasibility of the proposed offer, thus, individuals are encouraged to approach this task with thoroughness and precision. In essence, the 433-A (OIC) form embodies the IRS's commitment to providing pathways for taxpayers to overcome financial hurdles and achieve compliance.

Preview - IRS 433-A (OIC) Form

Form 433-A (OIC)

(April 2021)

Department of the Treasury — Internal Revenue Service

Collection Information Statement for Wage Earners and

Self-Employed Individuals

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 self-employed or has self-employment income. You are considered to be self-employed if you are in business for yourself, or carry on a trade or business.

►An individual who is personally responsible for a partnership liability (only if the partnership is submitting an offer)

►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

 

 

 

 

Personal and Household Information

 

 

 

 

 

Last name

 

First name

 

 

Date of birth (mm/dd/yyyy)

 

 

Social Security Number

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

-

-

Marital status

 

Home physical address (street, city, state, ZIP code)

Do you

 

 

 

 

 

 

Unmarried

Married

 

 

 

 

 

 

 

 

Own your home

 

 

 

Rent

 

If married, date of marriage (mm/dd/yyyy)

 

 

 

 

 

 

 

 

Other (specify e.g., share rent, live with relative, etc.)

 

 

 

 

 

 

 

 

 

 

County of residence

 

Primary phone

 

 

Home mailing address (if different from above or post office box number)

 

 

 

 

(

)

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Secondary phone

 

 

FAX number

 

 

 

 

 

 

 

 

 

 

(

)

-

 

(

)

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provide information about your spouse.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Spouse's last name

 

Spouse's first name

 

Date of birth (mm/dd/yyyy)

 

 

Social Security Number

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

-

-

Provide information for all other persons in the household or claimed as a dependent.

 

 

 

 

 

 

 

 

 

Name

 

 

 

Age

 

Relationship

 

Claimed as a dependent

Contributes to

 

 

 

 

 

 

 

on your Form 1040

 

household income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Yes

No

 

Yes

No

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Yes

No

 

Yes

No

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Yes

No

 

Yes

No

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Yes

No

 

Yes

No

 

 

 

 

 

 

 

 

 

 

 

 

 

Section 2

 

 

 

Employment Information for Wage Earners

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Complete this section if you or your spouse are wage earners and receive a Form W-2. If you or your spouse have self-employment income (that is you file a Schedule C, E, F, etc.) instead of, or in addition to wage income, you must also complete Business Information in Sections 4, 5, and 6.

Your employer’s name

Pay period

Weekly

Bi-weekly

Employer’s address (street, city, state, ZIP code)

 

 

 

Monthly

Other

 

 

 

 

 

Do you have an ownership interest in this

If yes, check the business interest that applies

 

business

 

Partner

Sole proprietor

 

Yes

No

Officer (complete Form 433-B (OIC))

 

 

 

 

 

 

Your occupation

How long with this employer

 

 

 

 

 

 

(years)

(months)

 

 

 

 

 

 

 

Spouse’s employer's name

Pay period

Weekly

Bi-weekly

Employer’s address (street, city, state, ZIP code)

 

 

 

Monthly

Other

 

 

 

 

Does your spouse have an ownership

If yes, check the business interest that applies

 

interest in this business

Partner

Sole proprietor

 

Yes

No

Officer (complete Form 433-B (OIC))

 

 

 

 

 

 

Spouse's occupation

How long with this employer

 

 

 

 

 

 

(years)

(months)

 

 

 

 

 

 

 

Catalog Number 55896Q

 

www.irs.gov

 

 

Form 433-A (OIC) (Rev. 4-2021)

Page 2

Section 3

Personal Asset Information

 

 

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)

 

Cash

Checking

Savings

Money Market Account/CD

Online Account

Stored Value Card

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bank name

 

 

 

 

 

 

 

 

 

 

 

Account number

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1a)

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Checking

 

Savings

Money Market Account/CD

Online Account

Stored Value Card

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bank name

 

 

 

 

 

 

 

 

 

 

 

Account number

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1b)

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total of bank accounts from attachment

(1c)

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Add lines (1a) through (1c) minus ($1,000) =

(1)

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment account

 

 

Stocks

 

 

Bonds

 

Other

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Name of Financial Institution

 

 

 

 

 

Account number

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current market value

 

 

 

 

 

 

 

 

 

 

 

Minus loan balance

 

 

 

 

$

 

 

 

 

 

 

X .8 = $

 

 

 

 

 

 

– $

 

 

 

=

(2a)

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment account

 

 

Stocks

 

 

Bonds

 

Other

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Name of Financial Institution

 

 

 

 

 

Account number

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current market value

 

 

 

 

 

 

 

 

 

 

 

Minus loan balance

 

 

 

 

$

 

 

 

 

 

 

X .8 = $

 

 

 

 

 

 

– $

 

 

 

=

(2b)

$

 

 

 

 

 

 

 

 

 

 

 

 

Virtual currency

 

 

Name of virtual currency

 

Email address used to

Location(s) of virtual

 

 

 

 

 

 

 

 

wallet, exchange or digital

set-up with the virtual

currency

 

 

 

Type of virtual currency

 

 

 

 

 

currency exchange (DCE)

currency exchange or DCE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current market value in U.S. dollars as of today

 

 

 

 

 

 

 

 

 

 

 

 

 

$

 

 

 

 

 

 

X .8 = $

 

 

 

 

 

 

 

 

 

 

 

=

(2c)

$

 

 

 

 

 

 

 

 

 

 

 

Total investment accounts from attachment. [current market value minus loan balance(s)]

(2d)

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Add lines (2a) through (2d) =

(2) $

Retirement account

401K

IRA

Other

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Name of Financial Institution

 

 

 

Account number

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current market value

 

 

 

 

 

Minus loan balance

 

 

 

$

 

 

X .8 = $

 

 

 

– $

 

=

(3a)

$

 

 

 

 

 

Total of retirement accounts from attachment. [current market value X .8 minus loan balance(s)]

(3b)

$

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

Name of Insurance Company

Policy number

 

 

 

 

 

 

 

 

 

 

Current cash value

Minus loan balance

 

 

 

$

 

– $

 

=

(4a)

$

 

 

 

 

 

Total cash value of life insurance policies from attachment

Minus loan balance(s)

 

 

 

$

 

– $

 

=

(4b)

$

 

 

 

 

 

 

 

 

 

Add lines (4a) through (4b) =

(4)

$

 

 

 

 

Catalog Number 55896Q

www.irs.gov

 

Form 433-A (OIC) (Rev. 4-2021)

Page 3

Section 3 (Continued)

Personal Asset Information

 

 

Real property (enter information about any house, condo, co-op, time share, etc. that you own or are buying including any assets owned by your spouse if you live in a community property state)

Is your real property currently for sale or do you anticipate selling your real property to fund the offer amount

 

Yes

(listing price)

 

No

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property description (indicate if personal residence, rental property, vacant, etc.)

Purchase date (mm/dd/yyyy)

 

 

 

 

 

 

 

 

 

 

 

 

 

Amount of mortgage payment

Date of final payment

How title is held (joint tenancy, etc.)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Location (street, city, state, ZIP code, county, and country)

 

Lender/Contract holder name, address (street, city,

 

 

 

 

 

 

 

 

 

 

 

 

state, ZIP code) and phone

 

 

 

 

 

 

 

 

 

 

 

 

 

Current market value

 

Minus loan balance (mortgages, etc.)

 

 

$

 

 

X .8 = $

 

 

 

–

$

 

 

 

 

 

 

 

 

 

 

 

(total value of real estate) =

(5a)

$

 

 

 

 

 

Property description (indicate if personal residence, rental property, vacant, etc.)

Purchase date (mm/dd/yyyy)

 

 

 

 

 

 

 

 

Amount of mortgage payment

Date of final payment

How title is held (joint tenancy, etc.)

 

 

 

 

 

 

 

 

 

 

Location (street, city, state, ZIP code, county, and country)

 

Lender/Contract holder name, address (street, city,

 

 

 

 

 

 

 

 

 

 

 

 

state, ZIP code) and phone

 

 

 

 

 

 

 

 

 

Current market value

 

Minus loan balance (mortgages, etc.)

 

 

$

 

 

X .8 = $

 

 

 

–

$

 

 

 

 

 

 

 

 

 

 

 

(total value of real estate) =

(5b)

$

 

 

 

 

 

 

 

 

Total value of property(s) from attachment [current market value X .8 minus any loan balance(s)]

(5c)

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Add lines (5a) through (5c) =

(5) $

Vehicles (enter information about any cars, boats, motorcycles, etc. that you own or lease)

Vehicle make & model

Year

 

 

Date purchased

 

Mileage

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Lease

 

Name of creditor

 

 

 

Date of final payment

 

Monthly lease/loan amount

 

 

 

Loan

 

 

 

 

 

 

 

 

 

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current market value

 

Minus loan balance

 

 

 

 

$

 

 

 

X .8 = $

 

 

– $

Total value of vehicle (if the vehicle

(6a)

$

 

 

 

 

 

is leased, enter 0 as the total value) =

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Subtract $3,450 from line (6a)

(6b)

$

 

 

 

 

 

 

 

 

 

(If line (6a) minus $3,450 is a negative number, enter "0")

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vehicle make & model

Year

 

 

Date purchased

 

Mileage

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Lease

 

Name of creditor

 

 

 

Date of final payment

 

Monthly lease/loan amount

 

 

 

Loan

 

 

 

 

 

 

 

 

 

 

$

 

 

 

 

 

 

 

 

 

 

 

Current market value

 

Minus loan balance

 

 

 

 

$

 

 

 

X .8 = $

 

 

 

– $

 

Total value of vehicle (if the vehicle

(6c)

$

 

 

 

 

 

is leased, enter 0 as the total value) =

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

If you are filing a joint offer, subtract $3,450 from line (6c)

 

 

 

 

 

 

 

 

 

 

 

(If line (6c) minus $3,450 is a negative number, enter "0")

(6d)

$

 

 

 

 

 

 

 

If you are not filing a joint offer, enter the amount from line (6c)

 

 

 

 

 

 

 

 

 

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 433-A (OIC) (Rev. 4-2021)

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

 

 

 

 

 

 

 

Minus loan balance

 

 

 

 

 

$

 

 

 

 

 

X .8 = $

 

 

 

 

– $

 

 

 

=

 

 

(7a)

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Value of remaining furniture and personal effects (not listed above)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Description of asset

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current market value

 

 

 

 

 

 

 

Minus loan balance

 

 

 

 

 

$

 

 

 

 

 

X .8 = $

 

 

 

 

– $

 

 

 

=

 

 

(7b)

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total value of valuable items listed from attachment [current market value X .8

 

minus any loan balance(s)]

(7c)

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Add lines (7a) through (7c) minus IRS deduction of $9,790 =

 

(7)

$

 

 

 

Do not include amount on the lines with a letter beside the number. Round to the nearest whole dollar.

 

 

Box A

 

 

 

 

Do not enter a negative number. If any line item is a negative, enter "0" on that line.

 

 

Available Individual Equity in Assets

 

 

 

 

 

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

Add lines (1) through (7) and enter the amount in Box A =

 

 

 

 

 

NOTE: If you or your spouse are self-employed, Sections 4, 5, and 6 must be completed before continuing with Sections 7 and 8.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Section 4

 

 

 

 

 

 

 

Self-Employed Information

 

 

 

 

 

If you or your spouse are self-employed (e.g., files Schedule(s) C, E, F, etc.), complete this section.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Is your business a sole proprietorship

 

 

 

 

Address of business (if other than personal residence)

 

Yes

 

No

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Name of business

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Business telephone number

 

 

 

 

Employer Identification Number

 

Business website address

 

 

 

 

Trade name or DBA

(

 

)

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Description of business

 

 

 

 

Total number of employees

 

Frequency of tax deposits

Average gross monthly

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

payroll $

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Do you or your spouse have any other

business interests? Include any

 

Business address (street, city, state, ZIP code)

 

 

interest in an LLC, LLP, corporation, partnership, etc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Yes

(percentage of ownership:

 

) Title

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

No

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Business name

 

 

 

 

 

 

 

 

 

 

 

Business telephone number

 

 

Employer Identification Number

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(

 

)

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Type of business (select one)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Partnership

LLC

 

 

 

Corporation

Other

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Section 5

 

 

 

 

 

 

Business Asset Information (for Self-Employed)

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bank name

 

 

 

 

 

 

 

Account number

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(8a)

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash

Checking

Savings

Money Market Account/CD

Online Account

Stored Value Card

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bank name

 

 

 

 

 

 

 

Account number

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(8b)

$

 

 

 

 

 

 

 

 

 

 

 

 

 

Virtual currency

Name of virtual currency

 

Email address used to

Location(s) of virtual

 

 

 

 

 

 

wallet, exchange or digital

set-up with the virtual

currency

 

 

 

Type of virtual currency

 

 

 

currency exchange (DCE)

currency exchange or DCE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current market value in U.S. dollars as of today

 

 

 

 

 

 

 

 

$

 

 

 

X .8 = $

 

 

 

 

 

=

(8c)

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total bank accounts from attachment

(8d)

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Add lines (8a) through (8d) =

(8)

$

Catalog Number 55896Q

 

 

 

 

www.irs.gov

 

 

Form 433-A (OIC) (Rev. 4-2021)

 

 

 

 

 

 

 

 

 

 

 

 

 

Page 5

Section 5 (Continued)

 

Business Asset Information (for Self-Employed)

 

 

 

Description of asset

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current market value

 

 

 

Minus loan balance

 

Total value (if leased or used

 

 

 

$

 

X .8 = $

 

 

 

– $

 

 

 

in the production of income,

=

(9a)

$

 

 

 

 

 

 

enter 0 as the total value)

 

 

 

 

 

 

 

 

 

 

 

 

 

Description of asset:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current market value

 

 

 

Minus Loan Balance

 

Total value (if leased or used

 

 

 

$

 

X .8 = $

 

 

 

– $

 

 

 

in the production of income,

=

(9b)

$

 

 

 

 

 

 

enter 0 as the total value)

 

 

 

 

 

Total value of assets listed from attachment [current market value X .8 minus any loan balance(s)]

(9c)

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Add lines (9a) through (9c) =

(9)

$

 

 

 

 

 

IRS allowed deduction for professional books and tools of trade –

(10)

$

 

 

 

 

 

 

 

Enter the value of line (9) minus line (10). If less than zero enter zero. =

(11)

$

Notes Receivable

 

 

 

 

 

 

 

 

 

 

 

 

Do you have notes receivable

 

Yes

No

 

 

 

 

 

 

If yes, attach current listing that includes name(s) and amount of note(s) receivable

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts Receivable

 

 

 

 

 

 

 

 

 

 

 

 

Do you have accounts receivable, including e-payment, factoring

Yes

 

No

 

 

 

companies, and any bartering or online auction accounts

 

 

 

 

If yes, provide a list of your current accounts receivable

 

 

 

 

 

 

 

 

Do not include amounts from the lines with a letter beside the number [for example: (9c)].

Box B

 

 

 

 

 

 

 

 

 

Round to the nearest whole dollar.

Available Business Equity in

 

 

Do not enter a negative number. If any line item is a negative, enter "0" on that line.

Assets

 

 

 

 

 

 

 

 

 

Add lines (8) and (11) and enter the amount in Box B =

$

 

Section 6

 

Business Income and Expense Information (for Self-Employed)

 

 

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.

Period provided beginning

through

 

 

 

 

 

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 6-12 months income/receipts to determine your gross monthly income/receipts)

 

 

 

 

 

 

 

 

Gross receipts

 

 

(12)

$

 

 

 

 

 

Gross rental income

 

 

(13)

$

 

 

 

 

 

Interest income

 

 

(14)

$

 

 

 

 

 

Dividends

 

 

(15)

$

 

 

 

 

 

Other income

 

 

(16)

$

 

 

 

 

 

Add lines (12) through (16) =

(17)

$

Business expenses (you may average 6-12 months expenses to determine your average expenses)

 

 

 

 

 

 

 

Materials purchased (e.g., items directly related to the production of a product or service)

 

(18)

$

 

 

 

 

 

Inventory purchased (e.g., goods bought for resale)

 

 

(19)

$

 

 

 

 

 

Gross wages and salaries

 

 

(20)

$

 

 

 

 

 

Rent

 

 

(21)

$

 

 

 

 

Supplies (items used to conduct business and used up within one year, e.g., books, office supplies, professional equipment, etc.)

 

(22)

$

 

 

 

 

 

Utilities/telephones

 

 

(23)

$

 

 

 

 

 

Vehicle costs (gas, oil, repairs, maintenance)

 

 

(24)

$

 

 

 

 

 

Business insurance

 

 

(25)

$

 

 

 

 

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)

$

 

 

 

 

 

Other business expenses (include a list)

 

 

(28)

$

 

 

 

 

 

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

 

Subtract line (29) from line (17) and enter the amount in Box C =

$

 

Catalog Number 55896Q

www.irs.gov

Form 433-A (OIC) (Rev. 4-2021)

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, non-liable spouse, significant other, children, and others who contribute to the household. This is necessary for the IRS to accurately evaluate your offer.

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

 

 

 

 

 

 

 

 

 

 

 

 

Gross wages

Social Security

 

Pension(s)

Other income (e.g. unemployment)

 

 

$

 

+ $

 

+ $

 

 

+ $

 

Total primary

(30)

$

 

 

 

 

 

taxpayer income =

 

 

 

 

 

 

 

 

 

 

 

 

Spouse

 

 

 

 

 

 

 

 

 

 

 

 

Gross wages

Social Security

 

Pension(s)

Other Income (e.g. unemployment)

 

 

$

 

+ $

 

+ $

 

 

+ $

 

Total spouse

(31)

$

 

 

 

 

 

income =

 

 

 

 

 

 

 

 

 

 

 

 

Additional sources of income used to support the household, e.g., non-liable spouse, or anyone else who may

 

 

contribute to the household income, etc. List source(s)

 

 

 

 

(32)

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest, dividends, and royalties

 

 

 

 

 

 

 

 

(33)

$

 

 

 

 

 

 

 

 

Distributions (e.g., income from partnerships, sub-S Corporations, etc.)

 

 

 

 

(34)

$

 

 

 

 

 

 

 

 

 

 

 

 

 

Net rental income

 

 

 

 

 

 

 

 

 

 

(35)

$

 

 

 

 

 

 

 

 

 

 

 

Net business income from Box C

 

 

 

 

 

 

 

 

(36)

$

 

 

 

 

 

 

 

 

 

 

 

Child support received

 

 

 

 

 

 

 

 

(37)

$

 

 

 

 

 

 

 

 

 

 

 

 

 

Alimony received

 

 

 

 

 

 

 

 

 

 

(38)

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Round to the nearest whole dollar.

Box D

 

 

 

 

 

 

 

 

 

Total Household Income

 

 

 

Do not enter a negative number. If any line item is a negative, enter "0" on that line.

 

 

 

$

 

 

 

 

 

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 http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Collection-Financial-Standards.

 

 

 

 

 

 

 

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)

 

 

monthly rent payment

 

(40)

$

 

 

 

 

 

 

 

 

Vehicle loan and/or lease payment(s)

 

 

 

 

 

(41)

$

 

 

 

 

 

 

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

 

 

 

reasonable estimate of these expenses may be used

 

(43)

$

Health insurance premiums

 

 

 

 

 

(44)

$

 

 

 

 

 

 

Out-of-pocket health care costs (e.g. average monthly cost of prescription drugs, medical services, and medical supplies like

 

(45)

$

eyeglasses, hearing aids, etc.)

 

 

 

 

 

Court-ordered payments (e.g., monthly cost of any alimony, child support, etc.)

 

(46)

$

 

 

 

 

 

 

Child/dependent care payments (e.g., daycare, etc.)

 

(47)

$

 

 

 

 

 

 

 

 

Life insurance premiums

 

 

 

 

 

(48)

$

 

 

 

 

 

 

Current monthly taxes (e.g., monthly cost of federal, state, and local tax, personal property tax, etc.)

 

(49)

$

 

 

 

 

 

 

Secured debts/Other (e.g., any loan where you pledged an asset as collateral not previously listed, government guaranteed

 

 

 

student loan, employer required retirement or dues)

List debt(s)/expense(s)

 

(50)

$

 

 

 

 

 

 

 

 

 

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 433-A (OIC) (Rev. 4-2021)

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)

 

 

 

 

 

 

 

Yes

No

 

 

 

 

 

 

 

 

 

 

Plaintiff

Location of filing

 

Represented by

 

 

 

 

Docket/Case number

Defendant

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amount of dispute

Possible completion date (mmddyyyy)

 

Subject of litigation

 

 

 

 

 

 

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Have you filed bankruptcy in the past 7 years (if yes, answer the following)

 

 

 

 

 

Yes

No

 

 

 

 

 

 

 

 

 

 

 

 

 

Date filed (mmddyyyy)

 

Date dismissed (mmddyyyy)

Date discharged (mmddyyyy)

Petition no.

 

Location filed

 

 

 

 

 

 

 

 

 

 

 

 

 

 

In the past 10 years, have you lived outside of the U.S. for 6 months or longer (if yes, answer the following)

 

 

 

Yes

No

 

 

 

 

 

 

 

 

 

 

 

Dates lived abroad: From (mmddyyyy)

 

To (mmddyyyy)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Are you or have you ever been party to any litigation involving the IRS/United States (including any tax litigation)

 

 

 

Yes

No

 

 

 

 

 

 

 

 

If yes and the litigation included tax debt, provide the types of tax and periods involved

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Are you the beneficiary of a trust, estate, or life insurance policy (if yes, answer the following)

 

 

 

 

 

Yes

No

 

 

 

 

 

 

 

 

 

 

 

Place where recorded

 

 

 

 

 

 

 

 

EIN

 

 

 

 

 

Name of the trust, estate, or policy

 

Anticipated amount to be received

When will the amount be received

 

 

 

 

 

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Are you a trustee, fiduciary, or contributor of a trust

 

 

 

 

 

 

 

Yes

No

 

 

 

 

 

 

 

 

 

 

 

 

Name of the trust

 

 

 

 

 

 

 

 

EIN

 

 

 

 

 

 

 

 

 

Do you have a safe deposit box (business or personal) (if yes, answer the following)

 

 

 

 

 

Yes

No

 

 

 

 

 

 

 

 

 

 

Location (name, address and box number(s))

 

 

 

Contents

 

 

 

Value

 

 

 

 

 

 

 

 

 

 

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 433-A (OIC) (Rev. 4-2021)
Date (mm/dd/yyyy)
Date (mm/dd/yyyy)

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

Page 8

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.

►Signature of Taxpayer

►Signature of Spouse

Remember to include all applicable attachments listed below.

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 complete bank statements for the three most recent months. If you operate a business, copies of the six most recent complete 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 Accounts Receivable or Notes Receivable, if applicable.

Verification of delinquent State/Local Tax Liability showing total delinquent state/local taxes and amount of monthly payments, if applicable.

Copies of court orders for child support/alimony payments claimed in monthly expense section.

Copies of Trust documents if applicable per Section 9.

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. Make sure the current tax year is included.

Completed and signed current Form 656.

Catalog Number 55896Q

www.irs.gov

Form 433-A (OIC) (Rev. 4-2021)
Download IRS 433-A (OIC) PDF Form

Form Data

Fact Name Description
Purpose The IRS 433-A (OIC) form is used to apply for an Offer in Compromise, allowing taxpayers to settle their debt for less than the full amount owed.
Eligibility Eligibility is based on the taxpayer's ability to pay, income, expenses, and asset equity.
Sections This form is divided into several sections, including personal information, employment details, personal asset information, and monthly household income and expenses.
Supporting Documentation Applicants must provide supporting documentation, such as pay stubs, bank statements, and property valuations, to substantiate the information provided.
Application Process Filing the form starts the evaluation process by the IRS to determine if an Offer in Compromise is appropriate based on the provided information.
Fees A non-refundable application fee and initial payment are generally required when submitting the form, except for qualifying low-income taxpayers.
Governing Laws The process and criteria for an Offer in Compromise, including the use of the IRS 433-A (OIC) form, are governed by federal tax laws and IRS regulations.

Instructions on Utilizing IRS 433-A (OIC)

Filling out the IRS 433-A (OIC) form is a critical step for individuals seeking to settle their tax debts with the IRS under more manageable terms. This document provides the IRS with detailed information about the applicant’s financial situation, helping the agency to determine an appropriate offer in compromise. The process can be intricate, requiring careful attention to detail to ensure that all information is accurate and complete. Below are the steps to fill out the form effectively, aiming to make the process as straightforward as possible for those who are navigating this pathway toward resolving their tax obligations.

  1. Gather required documentation: Before starting the form, collect all necessary financial documents. This includes bank statements, pay stubs, investment accounts, property valuations, and information on all debts and expenses.
  2. Section 1 - Personal Information: Fill in your full name, social security number (SSN), and contact information. If applicable, also provide the SSN, name, and contact information for your spouse.
  3. Section 2 - Employment Information for Wage Earners: Provide details about your employer or your spouse's employer if you are married. Include the employer's name, address, and the length of employment.
  4. Section 3 - Self-Employed Individuals: If self-employed, complete this section with your business information, such as the type of business, address, and gross monthly income.
  5. Section 4 - Other Financial Information: This section demands thorough detail about your monthly living expenses, including housing, utilities, food, transportation, and healthcare. Also, report any assets, such as real estate, vehicles, and personal belongings of significant value.
  6. Section 5 - Business Information: If you own a business, provide the required information regarding business assets, such as cash on hand, accounts receivable, and inventory.
  7. Section 6 - Additional Information: Answer all additional questions, which can include inquiries about previous offers in compromise, bankruptcy filings, and other relevant financial details.
  8. Review and Sign: Carefully review all the information provided to ensure accuracy. Inaccuracies may lead to delays or denial of your offer. After reviewing, sign and date the form. If you are married and filing jointly, your spouse must also sign.
  9. Compile Supporting Documentation: Attach all required documentation that supports the financial information you’ve outlined in the form. This can include pay stubs, bank statements, and bills.
  10. Submit the Form: Once the form and all supporting documents are complete, submit them to the appropriate IRS address. This information can be found in the instructions for the IRS 433-A (OIC) form or on the IRS website.

After submitting the IRS 433-A (OIC) form, the waiting period begins. The IRS reviews your offer, a process that can take several months. During this time, it's crucial to maintain current tax compliance and respond promptly to any requests from the IRS for additional information. Successfully navigating the complexities of this form puts you one step closer to resolving your tax debt and moving forward with financial stability.

Obtain Answers on IRS 433-A (OIC)

  1. What is the purpose of the IRS Form 433-A (OIC)?

    The IRS Form 433-A (OIC) is used to apply for an Offer in Compromise (OIC), allowing individuals to settle their tax debt for less than the full amount they owe. It provides the IRS with detailed financial information about the taxpayer's income, expenses, assets, and liabilities. This form is essential for demonstrating to the IRS that paying the full amount of tax owed would create financial hardship or be unjust or inequitable.

  2. Who needs to fill out the IRS Form 433-A (OIC)?

    Individuals who are unable to pay their full tax liability, or doing so would create a financial hardship, should complete the IRS Form 433-A (OIC). It's specifically designed for those seeking an Offer in Compromise and is a critical step in that process. Before submitting this form, taxpayers should ensure they have filed all required tax returns and made any required estimated payments.

  3. What information do I need to complete the Form 433-A (OIC)?

    To complete the Form 433-A (OIC), individuals will need comprehensive information about their financial situation. This includes, but is not limited to:

    • All sources of income, such as wages, business income, and investment income.
    • Monthly living expenses, including rent or mortgage, food, utilities, and transportation.
    • Assets, including cash, bank accounts, real estate, vehicles, and personal belongings with significant value.
    • All liabilities and debts, such as credit cards, loans, and other outstanding obligations.

  4. Is there a fee to submit the IRS Form 433-A (OIC)?

    Yes, there is generally a fee to submit the IRS Form 433-A (OIC), along with the Offer in Compromise. The application fee may change, so it’s recommended to check the latest IRS guidelines. However, some individuals may qualify for a low-income certification, potentially waiving this fee. The application package should include information on whether you might be eligible for such a waiver.

  5. How long does it take for the IRS to decide on an Offer in Compromise after submitting Form 433-A (OIC)?

    After submitting Form 433-A (OIC), the IRS takes on the rigorous task of carefully reviewing the provided information to make a decision. This process can be lengthy, typically taking anywhere from four to six months. However, processing times can vary based on the complexity of the offer, the completeness of the submitted form, and the IRS's current backlog. Taxpayers should remain patient but also proactive, ensuring they respond promptly to any requests for additional information from the IRS to avoid further delays.

Common mistakes

When dealing with the IRS 433-A (OIC) form, which is a crucial document for proposing an Offer in Compromise to the IRS, people often find themselves tripped up by common pitfalls. Though navigating tax forms can be daunting, being aware of these mistakes can simplify the process significantly. Here’s a close look at the five mistakes to avoid for a smoother experience:

  1. Not double-checking personal information: One of the simplest yet most frequent errors is entering incorrect personal information. This includes wrong Social Security numbers, misspelled names, or outdated addresses. Accuracy in these details is crucial for the IRS to process your form.

  2. Overlooking income sources: All income must be reported on the IRS 433-A (OIC) form. This includes not only your primary job but also any side gigs, investments, or rental incomes. People often forget to include part-time jobs or freelance work, which can lead to discrepancies and issues with your offer.

  3. Underestimating expenses: Accurately reporting your monthly expenses is key to making a realistic offer to settle your tax debt. Commonly, individuals underestimate or forget to include certain living expenses, which can lead to an unrealistic portrayal of their financial situation. Make sure to include all relevant expenses to ensure a fair offer is made.

  4. Failing to provide documentation: The IRS requires documentation for nearly everything claimed on the 433-A (OIC) form. This includes proof of income, expenses, asset valuations, and more. Failure to attach the necessary supporting documents can lead to a rejection of your offer.

  5. Ignoring tax liabilities: Sometimes, people submit the IRS 433-A (OIC) without fully understanding their tax liabilities. It is essential to review your tax history and include all liabilities, regardless of how insignificant they might seem. Overlooking any taxes owed can complicate the process or lead to the dismissal of your offer.

While filling out tax forms can feel overwhelming, taking the time to avoid these common errors can lead to a more favorable outcome with your Offer in Compromise. Always remember, thoroughness and accuracy are your best tools in this process.

Documents used along the form

When dealing with the IRS, particularly in attempts to settle tax debts through an Offer in Compromise (OIC) using Form 433-A (OIC), it's essential to have a comprehensive understanding of the associated forms and documents required for a successful submission. These additional documents play a crucial role in providing the IRS with a complete financial picture of the applicant, thereby facilitating the review process. Below is a list of some of the most commonly required forms and documents that accompany Form 433-A (OIC).

  • Form 656: Known as the Offer in Compromise form, it serves as the actual proposal for the settlement amount you’re willing to pay to the IRS. It complements Form 433-A (OIC) by outlining the terms of your offer and the basis for its acceptance.
  • Form 1040: The U.S. Individual Income Tax Return form is often required for the most recent tax year if the applicant has not already filed. This document provides the IRS with the latest snapshot of the taxpayer’s annual income and tax liability.
  • Form W-2 and/or 1099: These forms report income from employment (W-2) or other sources such as independent contracting work (1099). They verify the income reported on your tax return and in your OIC application.
  • Bank Statements: Typically, the last three to six months' worth of statements are needed to verify income, expenses, and the ability to pay. These documents are crucial for substantiating the financial information provided on Form 433-A (OIC).
  • Pay Stubs: Recent pay stubs (usually the last three months) are required to provide a current and accurate measure of your income. This information helps the IRS determine your ability to fulfill the terms of the offer.
  • Proof of Expenses: Receipts, bills, and other documentation of monthly living expenses such as rent, utilities, insurance, and transportation costs. These documents are essential to validate your claimed allowable living expenses on Form 433-A (OIC).

Effectively navigating the complexities of an Offer in Compromise requires careful attention to detail and a thorough understanding of the required documentation. By successfully compiling and submitting these forms and documents in concert with Form 433-A (OIC), applicants significantly improve their chances of reaching a favorable resolution with the IRS. Seeking professional guidance can also provide invaluable assistance through this intricate process, ensuring that all paperwork is in order and accurately reflects the applicant's financial situation.

Similar forms

  • IRS 433-F (Collection Information Statement for Wage Earners and Self-Employed Individuals): This document is akin to the IRS 433-A (OIC) because it gathers financial information from individuals, focusing on those who are wage earners or self-employed. Both forms are used by the IRS to assess an individual's ability to pay outstanding taxes, but the 433-F is generally utilized for setting up payment plans rather than for offer in compromise cases.

  • IRS Form 656 (Offer in Compromise): This form is directly related to the 433-A (OIC) as it is also part of the offer in compromise application process. While the 433-A (OIC) collects detailed financial information about the applicant, Form 656 is where the taxpayer actually proposes the offer amount they can pay to settle their debt. Both forms are necessary steps in requesting an offer in compromise from the IRS.

  • IRS Form 1040 (U.S. Individual Income Tax Return): The connection between IRS Form 1040 and the IRS 433-A (OIC) revolves around tax liability information. To complete the offer in compromise application accurately, individuals often reference their Form 1040, as it outlines their income, deductions, and credits, providing a comprehensive overview of their financial situation for the tax year.

  • IRS Form 4506-T (Request for Transcript of Tax Return): This form is used to request a transcript of a tax return or other tax records. Applicants often use it in conjunction with the 433-A (OIC) to provide supporting documentation for their financial status and tax compliance history. It helps in substantiating the income and tax information declared on the offer in compromise application.

  • IRS Form 2848 (Power of Attorney and Declaration of Representative): While the 433-A (OIC) is used by individuals to inform the IRS of their financial situation, Form 2848 is utilized to authorize another individual, such as a tax attorney or accountant, to communicate with the IRS on their behalf. Those filing a 433-A (OIC) may also file this form if they are seeking professional help in navigating the offer in compromise process.

  • IRS Form 8821 (Tax Information Authorization): Similar to Form 2848, Form 8821 authorizes a third party to access and receive an individual's tax information but doesn’t allow them to represent the taxpayer before the IRS. It can be essential for individuals applying for an offer in compromise who need a tax professional to review their financial and tax information to properly prepare the 433-A (OIC).

  • Schedule C (Profit or Loss From Business): Found within the IRS Form 1040, Schedule C is specifically designed for self-employed individuals to report earnings and expenses from their business. This form's relevancy to the 433-A (OIC) resides in its detailed account of a taxpayer's business finances, which is crucial information for completing the offer in compromise application accurately when self-employed income is involved.

  • Form 433-B (OIC) (Collection Information Statement for Businesses): This form is the business counterpart to the 433-A (OIC) and collects financial information from businesses that are applying for an offer in compromise. While the 433-A (OIC) is intended for individuals, the 433-B (OIC) serves a similar purpose but is geared towards understanding the financial situation of businesses.

  • IRS Form 9465 (Installment Agreement Request): Individuals who find themselves unable to pay their tax debt in full may use Form 9465 to request a monthly payment plan. Although its primary function is different from the 433-A (OIC), which seeks to compromise tax debt, both forms address situations where taxpayers are unable to meet their tax liabilities in full and are seeking IRS-approved payment solutions.

Dos and Don'ts

The IRS Form 433-A (OIC) is a crucial document used when applying for an Offer in Compromise (OIC), allowing taxpayers to settle their debt for less than the full amount owed. Here are several important dos and don'ts to consider when completing this form to ensure the process is handled correctly and efficiently.

Do:

  1. Gather all required financial information before starting the form. This ensures accuracy and completeness.

  2. Be truthful and transparent about your financial situation. The IRS requires honest disclosure to make an informed decision.

  3. Review the form and instructions provided by the IRS carefully. Understanding each section can help prevent mistakes.

  4. Consider consulting with a tax professional. Their expertise can be invaluable in navigating the complexities of tax debt resolution.

  5. Double-check all calculations. Errors can delay the process or affect the outcome of your application.

  6. Include documentation to support the figures reported on the form. Adequate documentation can strengthen your case.

  7. Sign and date the form. An unsigned form is considered incomplete and will not be processed.

Don't:

  1. Estimate expenses or income. Use actual numbers to provide the IRS with an accurate picture of your financial situation.

  2. Leave sections blank unless instructed. If a section does not apply to you, write “N/A” (not applicable) to show that you have considered it.

  3. Ignore deadlines. Submitting the form in a timely manner is essential for your Offer in Compromise to be considered.

  4. Forget to keep a copy of the form and all supporting documents for your records. This can be critical for future reference or in case of discrepancies.

  5. Underreport assets, income, or liabilities. Doing so can lead to rejection of your offer or potential legal consequences.

  6. Assume one size fits all. Each taxpayer’s situation is unique, and the form should be filled out with your specific circumstances in mind.

  7. Give up too easily. If you’re overwhelmed, seek assistance from a tax professional who can guide you through the process.

Misconceptions

The IRS 433-A (OIC) form, crucial in submitting an Offer in Compromise, is often misunderstood. Here, we clarify some of the most common misconceptions:

  • Everyone qualifies for an Offer in Compromise: Not all taxpayers qualify for an Offer in Compromise. The IRS considers your ability to pay, income, expenses, and asset equity when determining eligibility.

  • Filling out the form guarantees IRS acceptance: Completing the IRS 433-A (OIC) form does not guarantee acceptance of your Offer in Compromise. The success of an offer depends on thorough documentation and the IRS's assessment of your financial situation.

  • The process is quick: The process for an Offer in Compromise can be lengthy, often taking several months to a year. Patience is required as the IRS reviews your financial situation in detail.

  • Offers are always accepted if you cannot pay in full: Even if paying your tax debt in full is not an option, the IRS may not accept your offer if they believe you can pay through an installment agreement or other means.

  • You must hire a professional to submit an OIC: While tax professionals can provide valuable assistance, taxpayers can complete and submit the form themselves. It is vital, however, to review the instructions carefully and provide complete and accurate information.

  • Submitting an Offer in Compromise stops all collection activities: While submitting an Offer in Compromise may delay certain collection activities, it does not stop all actions. The IRS may still pursue other collection methods until the offer has been accepted and the agreed terms are fulfilled.

Key takeaways

Filling out the IRS 433-A (OIC) form correctly is crucial for individuals seeking to offer a compromise to the IRS concerning their tax debts. This complex form requires detailed financial information, making its proper completion essential for a successful offer. Here are five key takeaways to consider when preparing and using this form:

  • Thoroughness is Key: Every section of the form should be filled out with accurate and current financial details. Incomplete or inaccurate information can lead to the rejection of your offer or a request for additional information, delaying the process.
  • Documentation is Essential: Supporting documents must accompany the 433-A (OIC) form. This includes proof of income, expenses, assets, and liabilities. Having clear and organized documentation can strengthen your offer and facilitate a smoother review process by the IRS.
  • Honesty is Mandatory: It's important to be truthful in all the information provided on the form. The IRS conducts thorough verifications, and any attempt to hide assets or underreport income can result in severe penalties, including potential criminal charges.
  • Professional Advice Can Help: Given the complexities of tax laws and the potential for significant financial implications, seeking advice from a tax professional or attorney can be beneficial. These experts can provide guidance on how to present your financial situation in the best light and increase the chances of an acceptable offer.
  • Follow-Up is Necessary: After submitting the form and all required documentation, it's important to follow up with the IRS periodically. This will keep you informed of the status of your offer and ensure any requests for additional information are addressed promptly.

By adhering to these key points, individuals can navigate the challenges of filling out the IRS 433-A (OIC) form more effectively, ultimately moving closer to resolving their tax liabilities.

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