IRS Form 433-A – Collection Information Statement (Individuals)

Over 10 million Americans owe back taxes to the Internal Revenue Service, and many must complete IRS Form 433-A before the IRS will consider payment options. The Collection Information Statement (Individuals) form is one of the IRS's most detailed financial statements to determine a taxpayer’s ability to pay.

IRS Form 433-A collects a wide range of financial information, including monthly income, living expenses, personal asset information, and business assets for self-employed individuals. By reviewing this data, the IRS calculates how much you can reasonably pay toward your tax debt without leaving you unable to cover necessary expenses.

Receiving Form 433-A is serious, but it can also be an opportunity. If you submit the form correctly, it can lead to opportunities such as installment agreements, partial payment installment agreements, and other tax relief programs. Whether you are a wage earner, sole proprietor, or independent contractor, understanding the form and responding accurately is critical to protecting your assets and resolving your tax liability. This guide will walk you through what IRS Form 433-A is, why you might receive it, what happens if you ignore it, and the relief options available. 

What Is IRS Form 433-A?

IRS Form 433-A is the Collection Information Statement for Individuals used by the Internal Revenue Service to evaluate your financial situation and determine how much you can pay toward your tax debt. It is more detailed than Form 433-F and is typically required when you owe significant taxes or request long-term relief.

Purpose of IRS Form 433-A

The form gives the IRS a complete picture of your monthly income, living expenses, personal assets, and bank accounts. This information helps them decide whether you qualify for an installment agreement, partial payment installment agreement, or offer in compromise, and what your monthly payment amount should be.

Who Must Complete It

Form 433-A is required for wage earners and self-employed individuals, including sole proprietors and independent contractors. If you operate a business, you must report monthly business income, monthly business expenses, gross receipts, business bank accounts, and tax deposits.

Information You Must Provide

You will need to disclose:

• Personal assets: Vehicles, home equity, mutual funds, money market accounts, and loan balances
• Business assets: Equipment, business bank accounts, and receivables
  
  
• Employment information: Employer details, pay frequency, and other income streams

Why Accuracy Matters

Incorrect or missing information—such as underreporting the fair market value of assets—can delay your case and lead to more IRS scrutiny. For many taxpayers, this form is the first step toward real tax relief and avoiding federal tax liens.

Why Did You Receive IRS Form 433-A?

Receiving IRS Form 433-A means the Internal Revenue Service wants to examine your finances more closely before deciding how to proceed with your case. The form is commonly requested when you have an outstanding tax liability and must prove your ability to pay.

Triggers for Receiving the Form

The IRS may request Form 433-A if:

• You have unpaid income taxes or a significant tax debt that cannot be paid immediately.
  
  
• You submitted an installment agreement or a partial payment installment agreement request.
  
  
• You applied for an offer in compromise or claimed financial hardship.
  
  
• Your case was assigned to a revenue officer for active collection.

Who Is Required to Respond

Both wage earners and self-employed individuals (including sole proprietors and independent contractors) may be required to complete the form. If you own a business, you must report business income, expenses, gross receipts, business bank accounts, and employment information.

Why the IRS Needs This Information

The IRS uses the form to compare your financial situation against collection financial standards. This helps them determine:

• Whether you qualify for long-term payment plans or a reduced monthly payment amount
  
  
• If your case should be placed in the currently not collectible status
  
  
• Whether enforcement actions such as federal tax liens are appropriate

Responding quickly demonstrates good faith and can prevent collection actions from escalating.

Consequences of Ignoring IRS Form 433-A

Failing to respond to IRS Form 433-A can lead to fast and severe action by the Internal Revenue Service. Here are the key risks:

• Federal Tax Liens and Levies: Ignoring the request allows the IRS to file federal tax liens on your property and levy your personal bank accounts or garnish wages. These actions can severely impact your credit and access to funds.
  
  
• Assignment to a Revenue Officer: If your case is escalated, a revenue officer may investigate your finances more aggressively and seize assets, including mutual funds, money market accounts, and business bank accounts.
  
  
• Penalties and Interest Growth: Not responding does not stop penalties from accumulating. Your outstanding tax liability grows daily, increasing your total balance and potentially limiting your ability to negotiate low monthly payment options later.
  
  
• Loss of Relief Eligibility: Without a completed collection information statement, you cannot qualify for payment plans, partial payment installment agreements, or tax relief programs. This means you could face stricter collection measures and greater future tax debt.
  
  
• Credit Impact and Loan Issues: Tax liens can lower your credit limit and make it harder to access financing. Lenders may review your loan balances more closely, and some may refuse to extend new credit until the tax issue is resolved.

Completing Form 433-A promptly keeps more options open and prevents these costly consequences.

Relief and Resolution Options

Completing IRS Form 433-A gives you access to a range of IRS-approved programs designed to help resolve tax debt in a manageable way. The Internal Revenue Service reviews your financial information to decide which solution suits your situation.

Payment Plans and Installment Agreements

The most common solution is an installment agreement, which allows you to pay your tax liability in smaller monthly amounts. There are two main types:

Table 1: Short-Term vs. Long-Term Installment Agreement Comparison

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A partial payment installment agreement may also be available if you cannot fully pay before the collection period ends. This agreement allows a low monthly payment based on your reported monthly income and living expenses.

Offer in Compromise

For taxpayers who cannot pay in full, an offer in compromise allows settlement for less than the total outstanding tax liability. Before approval, the IRS considers your personal assets, investment assets, life insurance policy cash value, net business income, and net rental income.

Currently Not Collectible (CNC) Status

If you are experiencing financial hardship and your monthly income barely covers necessary living expenses, the IRS may place your account in a currently non-collectible status. This temporarily halts levies, wage garnishment, and federal tax liens, though interest will continue to accrue.

Additional Tax Relief Programs

Taxpayers may also request penalty abatement, use the Taxpayer Advocate Service for assistance, or seek specialized programs for those with unfiled tax returns or trust fund recovery penalty issues.

How to Respond to IRS Form 433-A

Filling out IRS Form 433-A accurately and on time is essential to secure the best outcome. Here’s how to prepare and respond step-by-step.

Step 1: Gather Financial and Employment Details

Before starting, collect:

• Personal bank accounts, business bank accounts, money market accounts, and mutual funds with account numbers and balances
  
  
• Investment assets and other personal assets such as vehicles, safe deposit box contents, and property
  
  
• Loan balances and the cash value of any life insurance policy
  
  
• Employment information: employer name, address, social security number, and pay frequency
  
  
• For self-employed or sole proprietors: gross receipts, monthly business income, monthly business expenses, and tax deposits

Having complete records prevents delays and additional IRS requests.

Step 2: Report Monthly Income and Expenses

List all monthly income sources, including wages, self-employment, rental, and other income streams. Then report living expenses like housing, utilities, transportation, vehicle ownership costs, health insurance, and required estimated payments.

Table 2: Allowable vs. Actual Expenses Example

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Step 3: Calculate Asset Values

Determine fair market value for vehicles, property, and other assets. Subtract any loan balance to calculate equity accurately.

Step 4: Submit Accurately and On Time

Sign the financial statement under penalty of perjury and submit it by mail or fax to the address provided. Keep a copy for your records. Late or incomplete responses can result in escalation to a revenue officer and potential federal tax liens.

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Professional Help and Resources

Completing IRS Form 433-A can be stressful, especially if you juggle personal and business bank accounts and monthly business expenses. A missing account or incorrect financial statement can delay approval for your installment agreement or trigger additional IRS requests. 

Our IRS Transcript Services make this process easier. We securely retrieve your official IRS account and wage transcripts so you know exactly what the IRS sees before you file. Here’s how it works:

• Sign IRS Form 8821: Authorizes us to request your transcripts directly from IRS e-Services.
  
  
• We Retrieve Your Records: Including account, wage, income, and business tax transcripts.
  
  
• You receive a Complete Packet: Your records plus a plain-English summary, helping you verify reported gross receipts, monthly income, and tax deposits before submitting the form.

This saves hours calling the IRS, protects you from reporting errors, and gives peace of mind that your submission matches IRS records. Our service guarantees the accurate documentation of your net business income, investment assets, and other personal assets, whether self-employed or a sole proprietor. 

For complex cases—such as those involving federal tax liens, trust fund recovery penalty exposure, or financial hardship—our optional consultation connects you with a tax professional or attorney who can recommend the best tax relief options and negotiate a low monthly payment on your behalf.

Frequently Asked Questions (FAQs)

What financial information do I need to include on IRS Form 433-A?

You must include detailed financial information such as all personal bank accounts, investment assets, business bank accounts, and living expenses. If you are self-employed, you must also report business information like gross receipts, monthly business income, and monthly business expenses. This information helps the IRS determine whether you qualify for an installment agreement and ensures your statement for wage earners or the self-employed section is complete.

How does a partial payment installment agreement work?

A partial payment installment agreement allows you to make smaller monthly payments until the IRS collection statute expires. This option is often used when taxpayers owe income taxes but cannot pay the full balance before the statute ends. You must provide complete business information or sole proprietorship information if applicable. Accurate reporting on your tax form helps the IRS decide the right monthly payment amount for your financial situation.

Do I need to update IRS Form 433-A if my situation changes?

Yes, if your financial information changes significantly—such as a new job, an increase in income, or new business information—you must notify the IRS. Updated information helps them recalculate your monthly payment amount and keeps you in good standing with your agreement. Failure to report changes may result in default and enforcement action.

Can I qualify for tax relief if I already owe income taxes?

Yes, submitting accurate financial information on Form 433-A can make you eligible for offers in compromise programs, partial payment installment agreements, or currently noncollectible status. Providing complete business information and verifying your statement for wage earners or self-employment sections will improve your chance of approval for these relief options.

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