Payroll taxes are among the most important compliance areas for business owners and self-employed individuals. Employers must withhold federal income tax, Social Security, and Medicare taxes from employees’ paychecks and deposit these taxes accurately and on time with the IRS. Failing to meet these requirements can result in penalties, interest, and aggressive collection efforts.
The IRS may request a financial disclosure when a business owes federal taxes and cannot pay in full. IRS Form 433-B, officially known as the Collection Information Statement for Businesses, serves this purpose. It provides a full picture of the business’s financial situation, including income, assets, liabilities, and business affiliations. This form helps the IRS decide whether the business qualifies for a payment plan, an offer in compromise, or a temporary delay in collection.
Understanding how and when to file Form 433-B is essential for avoiding enforcement actions. Business owners, payroll service providers, and tax professionals often rely on it when resolving outstanding tax liabilities. Filing the form accurately and completely is critical to keeping resolution options open. This guide explains what Form 433-B is, who needs it, and how to file it step-by-step.
IRS Form 433-B, officially called the Collection Information Statement for Businesses, is used by the Internal Revenue Service (IRS) to assess a business’s financial condition. When a business owes federal taxes and cannot pay in full, this form provides the financial details the IRS needs to evaluate payment options. It includes information about the business’s income, expenses, bank accounts, available credit, and equipment. The IRS uses it to determine whether the business qualifies for relief or a structured payment plan.
Form 433-B differs from Form 433-A, which applies to individuals and sole proprietors. Instead, 433-B is designed for corporations, partnerships, S corporations, and limited liability companies (LLCs). It collects data that reflects the business’s financial situation, including monthly income, liabilities, investment accounts, and ownership of intangible assets. This makes it an essential tool for understanding how much a business can realistically pay toward its outstanding tax liability.
The IRS typically requests Form 433-B when a business applies for an installment agreement, partial payment installment agreement, or offer in compromise. It may also be needed to support a request for currently non-collectible status, especially during enforcement. A revenue officer might require this form to evaluate collection alternatives based on accurate financial information. Submitting the form helps the IRS determine whether temporary relief, reduced payments, or other solutions are appropriate.
Accurate and complete filing is critical. Mistakes, omissions, or outdated information can delay relief or trigger collection activity. If the IRS cannot verify financial details, it may reject the request and pursue enforcement instead. Knowing what Form 433-B is—and when it’s required—is the first step toward resolving a tax debt and regaining compliance with the Internal Revenue Service.
Understanding Payroll Tax Responsibilities and Risks
Employers are legally obligated to collect and submit payroll taxes on behalf of their employees. Every paycheck must have federal income tax, Social Security tax, and Medicare tax taken out of it. Businesses also have to pay the employer's share of Medicare and Social Security taxes, as well as the federal unemployment tax. You pay these taxes to the IRS on time, and if you don't, you could face fines.
Form 941, the Employer's Quarterly Federal Tax Return, is used to report payroll taxes. Based on the size of their payroll and their tax history, businesses are given a schedule for making deposits, either once a month or every two weeks. The IRS can charge a penalty of up to 15% for failure to deposit if a business doesn't pay its payroll taxes on time. These fines add to the amount of tax owed and make it harder to set up a payment plan in the future.
There are worse things that can happen with the Trust Fund Recovery Penalty (TFRP). This punishment happens when a business doesn't send in taxes that it has withheld from employees. The IRS may hold individuals personally liable, including a business owner, financial controller, or anyone with business contact information tied to payroll. The agency can seize personal assets to recover unpaid trust fund taxes, making the company a serious legal and financial risk.
Businesses that don't pay their payroll taxes may face harsh enforcement, such as liens, levies, or the seizure of their property. It's very important to fix the problem quickly if the business owes federal taxes and can't pay them all at once. The IRS can look at a business's finances and figure out how to fix them by filing Form 433-B. Knowing what your payroll tax responsibilities are and what could happen if you don't follow them can help you avoid expensive fines and keep your good standing with the IRS.
IRS Form 433-B is required when a business owes federal taxes and cannot pay the full amount immediately. The Internal Revenue Service uses this form to evaluate the business’s financial situation and determine eligibility for relief. It is typically submitted when a business seeks an installment agreement, a partial payment installment agreement, or an offer in compromise. The IRS uses the data to calculate a realistic monthly payment based on the business’s income, expenses, and available credit.
The form is also required during collection enforcement if the IRS assigns a revenue officer or files a Notice of Federal Tax Lien. Filing Form 433-B in these cases may help delay or prevent aggressive actions like bank levies or asset seizures. Businesses may also be asked to complete the form during Collection Due Process hearings, appeals, or when requesting a currently non-collectible status. In less urgent situations, voluntarily submitting Form 433-B can demonstrate good faith and buy time to resolve the debt.
The IRS requires a complete and current financial snapshot, including business bank accounts, assets, debts, and monthly income. Form 433-B must be updated if the business’s condition changes or if the IRS requests a new review. Programs such as the In-Business Trust Fund Express Installment Agreement may waive the form for small balances under $25,000, but most other relief options require it.
Failing to file Form 433-B when required can result in denying relief and continued enforcement. Businesses that owe federal taxes should act quickly to submit this collection information statement before the IRS escalates its actions. Filing on time and with accurate details increases the chances of qualifying for a favorable payment plan or delaying collection activity.
When a business can't pay all of its taxes and wants help, it must file IRS Form 433-B. The form gives the IRS a full picture of how the business is doing financially. It lets the IRS figure out if the business is eligible for an installment agreement, an offer in compromise, or another solution. If you fill out each section correctly, your chances of getting approved go up, and you won't have to wait longer than necessary.
Start by providing your legal business name, trade name (if different), and employer identification number (EIN). You must include the business’s full address, phone number, and a description of its primary operations. Select the appropriate business entity type—corporation, S corporation, partnership, or LLC.
This section also asks for key financial services details:
This section lists everyone responsible for collecting, depositing, or paying payroll taxes. These individuals can include business owners, officers, partners, or employees with financial authority. You must provide each individual's full name, title, home address, phone number, and Social Security Number.
You must also clarify the individual’s level of financial responsibility:
The IRS uses this information to determine potential personal liability under the Trust Fund Recovery Penalty.
This section covers additional information that may affect your case. You must include the court name, location, and case number if the business has filed for bankruptcy. If your business has other business affiliations, such as shared ownership in another entity, disclose that relationship and its financial relevance.
You are also required to provide the following disclosures:
These details allow the IRS to identify hidden or transferred assets that may be subject to collection.
This section requires a detailed inventory of your business’s assets and outstanding liabilities. Begin with cash, such as money stored in cash drawers or safes. Then, list each business bank account, including account numbers, bank names, current balances, and any available credit.
You are also required to document the following:
Accuracy here is essential, as this section informs IRS decisions regarding collection potential.
This section provides a monthly snapshot of your business’s cash flow. Begin with business income, including gross receipts from sales or services, rental income, interest, and other business income. Use a representative time frame—typically the most recent 6 or 12 months—and align your numbers with your last income tax return.
Next, list all monthly expenses:
Any large discrepancies between this section and your supporting financials may lead to rejection of your collection information statement.
Completing Form 433-B strengthens your case for a payment plan, partial payment installment agreement, or temporary delay in IRS collections. If you're unsure how to complete the form, consult a tax attorney or enrolled agent.
Submitting IRS Form 433-B without supporting documentation can result in processing delays or outright rejection. The IRS requires these documents to verify the financial information reported on the form. Accurate and complete documentation helps demonstrate that your business is acting in good faith and qualifies for a resolution option. Without it, the IRS may proceed with enforced collection.
You must include the following key documents with your submission:
The IRS may also request additional documentation, such as credit card summaries, proof of intangible assets, or government contract numbers. All documents must support the entries listed on Form 433-B and be consistent with your business’s financial reality.
Organizing your paperwork by section improves clarity for the assigned revenue officer and reduces the chance of follow-up requests. Providing everything the IRS expects upfront increases the likelihood of a smoother review and a favorable resolution decision.
Once you submit IRS Form 433-B, the IRS evaluates your business's ability to resolve its tax debt using the provided information. Based on the business’s income, assets, and financial situation, the IRS may offer several resolution paths if you have tax obligations. Each option depends on your business’s ability to make payments now or in the future. Selecting the right option can help avoid more severe enforcement actions.
An installment agreement allows your business to pay the outstanding tax liability over time in monthly payments. If the business owes federal taxes of $25,000 or less, it may qualify for the In-Business Trust Fund Express Installment Agreement, which does not require financial documentation. This option gives businesses up to 24 months to pay in full, provided they remain compliant with tax filings and deposits.
The IRS will review Form 433-B for larger tax debts to determine whether the business qualifies for a standard installment agreement. The IRS calculates the monthly payment amount based on your business’s financial situation, including income, expenses, and equity in business assets. Ongoing compliance is required to keep the agreement in good standing.
If full repayment is impossible, your business may qualify for a partial payment installment agreement. This option allows smaller monthly payments based on what the IRS determines your business can afford. The remaining balance may be forgiven once the collection period expires. However, the IRS may periodically request updated financials to reassess the agreement.
An offer in compromise (OIC) lets businesses settle their debt for less than the full amount owed. The IRS will only accept an offer if it reflects the most it expects to collect. Form 433-B evaluates income, available credit, and asset values. Businesses must be fully compliant before being considered.
Currently Not Collectible Status
If payment causes severe hardship, the IRS may place the account in a non-collectible status. Form 433-B must show that the business cannot pay anything without jeopardizing basic operations. The IRS will pause collection efforts but may re-review the case.
Best Practices and Common Mistakes
Completing IRS Form 433-B accurately is critical when your business seeks relief through a payment plan, offer in compromise, or other resolution. Because the IRS uses this form to evaluate your business’s financial situation, small errors can result in delays, rejections, or additional scrutiny. Following proven best practices—and avoiding common pitfalls—can improve your chances of success.
Always provide current and verifiable financial data. All figures should reflect your business’s most recent financial condition, not outdated or estimated values without explanation. Supporting documents, such as bank statements and profit and loss reports, should match the numbers reported on the form. Any inconsistencies may raise red flags during IRS review.
It is also important to complete every applicable section. If a particular question does not apply, writing “N/A” is better than leaving it blank. This signals the IRS that the omission is intentional and not an oversight. You should also ensure that your reported income, expenses, and asset values are consistent with your tax returns and financial statements.
A common mistake is failing to report assets like intangibles, available credit, or business equipment. Omitting these may give the impression of concealment, even if unintentional. Likewise, overstating business expenses or underreporting income can result in the IRS questioning the accuracy of your entire submission.
If you are unsure how to complete the form properly, consider working with a tax attorney or enrolled agent. Their expertise can help you avoid missteps and meet IRS expectations.
Ongoing Compliance and IRS Monitoring
The first step is filing IRS Form 433-B and securing a resolution agreement. Your business must comply with all ongoing tax obligations to remain in good standing. This includes timely filing all required tax returns, making monthly payments as agreed, and staying current on payroll tax deposits. If your business fails to meet these obligations, the IRS may terminate the agreement and resume enforcement actions.
The IRS does not approve an installment agreement and then walk away. It continues to monitor your business’s financial situation through periodic reviews. Depending on the type of resolution, you may be asked to submit updated financial information to ensure your monthly payment amount still reflects your ability to pay. If your business income increases or you can access more available credit, the IRS may adjust your agreement accordingly.
Even businesses classified as currently not collectible must remain compliant. The IRS will expect timely filing of future returns and may re-evaluate your account if your financial condition improves. The IRS pauses collections during this period, but the unpaid balance continues to accrue penalties and interest.
Failing to remain in compliance can result in serious consequences. If your business misses payments, accrues new tax debts, or files late returns, it may lose eligibility for favorable resolution terms. In some cases, the IRS may reinitiate liens or levies. To protect your agreement and avoid future disruptions, it is critical to stay organized, file on time, and fulfill all payment obligations.
IRS Form 433-B is used to evaluate a business’s ability to pay taxes owed to the federal government. It outlines business liabilities, income, assets, and operational details to help the IRS determine eligibility for tax relief. This form is required if your business owes taxes and seeks a payment arrangement. It also applies when the IRS evaluates requests from businesses that payroll service providers help manage or that handle taxes for wage earners.
Businesses that owe federal taxes and can’t pay in full must complete IRS Form 433-B. This includes payroll service providers, partnerships, corporations, and LLCs. If a business pays payroll taxes but can’t keep up with its tax bill, the IRS uses this form to assess its monthly income and liabilities. Both the employer and authorized business personnel should ensure the information is accurate. Individuals file a different version: IRS Form 433-A.
Currently, IRS Form 433-B cannot be submitted through an online portal. It must be filled out manually and submitted via fax or mail. Businesses should use the most current version from the IRS Forms library. Be sure to include your merchant account number and any financial identifiers. Submitting accurate information ensures the IRS can process your form promptly. Consider consulting a tax professional if your business engages in complex financial transactions.
An incomplete or inaccurate Form 433-B could delay your request and expose your business to collection actions. Incorrect entries, such as missing payroll data or business liabilities, may lead to rejected applications. Omitting details about how your business pays payroll taxes or errors in IRS forms can cause further issues. Tax professionals must verify all figures, including business monthly income, to avoid mistakes and reduce the risk of IRS enforcement.
Do I need to include personal assets on Form 433-B?
Form 433-B only asks for financial information about businesses. You do not need to include personal property unless the IRS pursues a Trust Fund Recovery Penalty and requests Form 433-A. All relevant business personnel and income sources must be reported. The IRS uses this form to analyze business-level risks and liabilities—not individual wealth. Please disclose any merchant account numbers, taxes owed, or related assets the business engages with financially.
Please let me know how long the IRS typically takes to review Form 433-B.
IRS review times for Form 433-B range from four to eight weeks. If your business owes taxes and the form is incomplete or unclear, the delay may be longer. Including business monthly income, liabilities, and payroll data is essential. The IRS evaluates the form to determine how your business pays payroll taxes, handles the additional Medicare tax, and pays wage earners. Inaccurate entries may result in collection efforts resuming.
If you don't file Form 433-B when asked, the IRS may start aggressive collection efforts. These actions include placing liens on business liabilities, garnishing funds, or seizing assets. Ignoring the IRS’s request puts your business in violation of federal tax law. By filing, your business intends to pay taxes, cooperate, and stay compliant. A tax professional can help ensure the form includes all financial data the IRS needs to evaluate.
Schedule your free, confidential tax relief review today.
Copyright © 2025 Get Tax Relief Now
