IRS Form 433-B Collection Information Statement Checklist
Overview and Purpose
IRS Form 433-B is the Collection Information Statement for business entities, including corporations, partnerships, and limited liability companies. The form helps the IRS evaluate a business’s financial status to determine eligibility for tax relief options and establish appropriate repayment arrangements.
It captures detailed financial, asset, and operational information to support accurate assessment and fair negotiations.
Understanding Form Versions
Two versions exist for different purposes. Standard Form 433-B is used for general collection purposes and installment agreements without offer calculations. Form 433-B (OIC) is specifically for Offer in Compromise applications and includes Section 5 for calculating minimum offer amounts. When applying for an Offer in Compromise, use Form 433-B (OIC) with Form 656.
Ten Essential Steps
Step 1: Gather Basic Information
Collect the legal business name, Employer Identification Number, addresses, contact numbers, website, business description, employee count, tax deposit frequency, average gross monthly payroll, and federal contractor status.
Step 2: Collect Documentation
Gather bank statements for three to six months, loan statements, depreciation schedules, asset valuations, and profit and loss statements covering six to twelve months.
Step 3: Identify Key Personnel
Document all owners, partners, officers, and major shareholders, including their names, titles, ownership percentages, salaries, Social Security Numbers, addresses, and contact information.
Step 4: Document Assets
List real estate, vehicles, equipment, inventory, and investments. For each asset, provide current fair market value, loan balances, and ownership details.
Step 5: Calculate Asset Equity
Subtract loan balances from current values to calculate net equity. Report zero if the loan exceeds the value; otherwise, round to the nearest dollar. For Form 433-B (OIC), apply an eighty percent multiplier where specified.
Step 6: Determine Income
Calculate gross monthly income over six to twelve months, including sales receipts, rental income, interest, dividends, and other revenue. Use actual documented figures, not estimates.
Step 7: Calculate Expenses
Document monthly expenses, including materials, inventory, wages, rent, supplies, utilities, vehicle costs, insurance, and taxes. Exclude non-cash expenses like depreciation.
Step 8: Calculate Remaining Income
Subtract total expenses from total income. Enter zero if expenses exceed income. This shows net cash flow available for tax payments.
Step 9: Complete Offer Calculations
Only for Form 433-B (OIC): multiply remaining monthly income by twelve for five or fewer payments, or by twenty-four for six to twenty-four-month payments. Add total available asset equity to determine the minimum offer amount.
Step 10: Review and Submit
Verify all sections are complete and accurate. An authorized officer, partner, or LLC member must sign under penalties of perjury. Attach all supporting documentation. Submit by mail to your assigned IRS representative. Electronic filing is unavailable. Retain copies for records.
Essential Rules
- Sign certifying all information is accurate and complete under penalties of perjury. Attach current financial records, including bank statements, asset valuations, profit and loss statements, and loan documents.
- Use Form 2848 if an authorized representative submits it on your behalf. Ensure it is current and includes all relevant tax years.
- Submit by mail to your assigned IRS office. Verify the address by checking your correspondence or contacting your representative. Retain proof of mailing and copies of all materials.
- Ensure asset valuations are reasonable and based on reliable sources such as professional appraisals, industry guides, or comparable market data. Document valuation sources.
- Avoid negative numbers or estimates. Enter zero for negative results. Use the actual documented amounts, rounded to the nearest dollar. Mark inapplicable questions as not applicable.
- Maintain consistency between income, expenses, assets, and liabilities. Ensure figures reconcile with supporting documentation. Discrepancies may delay processing.
- Incomplete or unsigned forms are invalid. Missing documentation may cause rejection. Include all required attachments properly labeled and organized.
- Follow Publication 5059 for detailed guidance. Consult IRS.gov for updates. Consider professional assistance for complex situations. Retain all materials throughout the collection process.
- Properly completing Form 433-B positions your business for the best outcome when resolving tax liabilities through installment agreements or other collection alternatives.
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This checklist is for educational purposes only and does not constitute tax or legal advice. Always review official IRS instructions and consult a qualified professional for guidance.
