IRS Form 433-A Instructions 2025: Step-by-Step Guide

IRS Form 433-A is a tax form the Internal Revenue Service uses to evaluate a taxpayer’s financial situation when full payment of income taxes is impossible. The Collection Information Statement gathers comprehensive financial information from self-employed individuals, wage earners, and others with significant tax liabilities. The form requires personal asset information, monthly expenses, and business income details to provide the IRS with a complete financial statement. When taxpayers owe income taxes, the agency uses this data to decide whether an installment agreement, Offer in Compromise, or currently not collectible status is appropriate.

Completing the form requires reporting personal assets such as vehicles, life insurance policy cash value, and other personal assets at fair market value. The IRS requires information about gross receipts, average monthly payroll, business bank accounts, and total monthly business income for business owners. Accurate disclosure of financial obligations, including child support, monthly car payments, and other expenses, ensures that taxpayers' ability to pay is evaluated fairly. Inaccurate economic hardship or disposable income reporting can delay the tax resolution process.

According to the IRS, Form 433-A is explained in Publication 1854: How to Prepare a Collection Information Statement. This official guidance confirms why taxpayers must provide detailed financial information, from secured debts to rental income. Reviewing the publication or working with a tax professional can help ensure accurate reporting of living expenses, asset equity, and outstanding tax liability. Providing comprehensive financial information allows the IRS to determine the most suitable resolution option while giving taxpayers a clear path forward.

Employment Information

Accurate employment information is a critical element of IRS Form 433-A. The form requires detailed financial information about wage income, average monthly payroll, and personal identifiers, such as a Social Security number. These details allow the Internal Revenue Service to evaluate a taxpayer’s ability to resolve an outstanding tax liability through structured monthly payments or other relief options. Omissions or inaccuracies may delay the tax resolution process, making it vital for individuals to provide comprehensive disclosure.

Wage Income and Basic Personal Details

• Taxpayers must report all wage income, including base pay, overtime, and any additional income sources an employer provides.
  
  
• Each submission must include a Social Security number and other basic personal details to ensure the records match previously filed tax forms.
  
  
• Average monthly payroll figures must be calculated carefully, with weekly and biweekly wages converted into consistent monthly amounts.
  
  
• Taxpayers should review paycheck stubs to confirm income figures before reporting.
  
  
• Accurate wage entries establish the foundation of the financial statement and directly affect calculations for disposable income and monthly payments.

Employer Data and Household Contributions

• Employment information requires the employer’s name, address, and the duration of current employment.
  
  
• Taxpayers must disclose the number of dependents or household members whose living expenses influence disposable income calculations.
  
  
• Monthly payments withheld for health insurance, retirement contributions, or child support must also be included.
  
  
• Any employer-provided benefits that reduce household financial obligations, such as transportation stipends, must be disclosed.
  
  
• Employment information also provides insight into income stability, which shapes the Internal Revenue Service’s expectations of payment reliability.

Providing complete employment information ensures the IRS receives a realistic picture of the taxpayer’s financial obligations. Thorough documentation demonstrates cooperation and avoids unnecessary complications in the tax resolution process. A clear, accurate employment section helps establish trust with the IRS and supports fair financial hardship and repayment capacity evaluation.

Financial and Business Information

Form 433-A requires taxpayers to disclose personal finances and business operations so the Internal Revenue Service can evaluate repayment capacity. A financial statement must include wage income, rental income, monthly expenses, secured debts, and other obligations such as child support or life insurance premiums. Each figure contributes to determining disposable income and the taxpayer’s overall ability to resolve an outstanding tax liability.

Personal Financial Information

Taxpayers must provide a complete record of monthly income and living expenses. This includes housing costs, utilities, transportation, medical needs, and secured debts such as mortgages or vehicle loans. Accurate disclosure helps establish a reliable foundation for calculating disposable income and ensures the IRS views the financial statement as credible.

Business Financial Information

Self-employed individuals must disclose gross receipts, total monthly business income, and monthly business expenses. Reports must cover rent, payroll, utilities, insurance, and other financial obligations. Business bank accounts, balances, and average monthly payroll must be documented, while equipment or property should be valued at fair market value. Subtracting secured debts from these figures produces accurate asset equity.

Thorough financial and business disclosure gives the IRS a complete view of the taxpayer’s situation. This clarity supports fair evaluation of economic hardship and ensures eligibility for appropriate relief programs such as installment agreements or Form 433-A OIC. Consistent documentation across income, expenses, and asset equity reinforces the taxpayer’s credibility throughout the resolution process.

Personal Asset Information

The personal asset information section of IRS Form 433-A requires taxpayers to disclose a wide range of assets. The Internal Revenue Service uses these details to calculate fair market value, asset equity, and overall ability to meet financial obligations. Each entry must be documented accurately, since the values directly affect the outcome of the financial statement and the broader tax resolution process.

• Real Estate: All residential and investment properties must be reported with fair market value, mortgage balance, and equity calculations. Documentation such as deeds, loan statements, or recent appraisals should support the reported numbers.
  
  
• Vehicles: Every vehicle, including cars, trucks, motorcycles, or recreational vehicles, must be listed. Vehicle ownership costs, monthly car payments, and vehicle operating costs must be included to reflect equity and financial obligations.
  
  
• Life Insurance: Policies with a cash value, such as whole life insurance, must be disclosed. Taxpayers must list the life insurance policy number, the insurer, the current cash value, and any outstanding loans secured against the policy.
  
  
• Other Personal Assets: Jewelry, valuable artwork, collectibles, and safe deposit box contents must be included in the disclosure. Omitting these assets may be considered an attempt to conceal value.
  
  
• Asset Equity: For each category, equity is determined by subtracting secured debts from fair market value. This calculation provides the IRS with a precise figure representing the portion of the asset that can satisfy a tax liability.

Comprehensive personal asset information demonstrates taxpayers' cooperation and commitment to accurate disclosure. Every listed item contributes to a complete financial picture that helps determine eligibility for relief programs such as an installment agreement or an Offer in Compromise. Transparent reporting of personal asset information supports a smoother review process, reduces the likelihood of delays, and fosters credibility with the IRS.

Calculating Monthly Income and Expenses

The Internal Revenue Service reviews monthly income and expenses to establish a taxpayer’s disposable income, representing the amount available to repay an outstanding tax liability. Form 433-A requires a clear distinction between all income sources and necessary living expenses to ensure a balanced financial statement. Proper calculations give the IRS a reliable view of the taxpayer’s economic hardship and realistic payment capacity.

Income and Expense Breakdown

Monthly Income

• Wage income: $3,800
• Rental income: $1,200
• Business income: $2,000
• Other income sources: $600

Total Monthly Income: $7,600

Monthly Expenses

• Living expenses: $2,200
• Vehicle operating costs: $450
• Child support: $300
• Monthly car payments: $400

Total Monthly Expenses: $3,350

• Wage income includes salary, overtime, and additional compensation from employers.
  
  
• Rental income must be reported with supporting records, whether from real estate or other personal assets.
  
  
• Business income represents gross receipts minus expenses, providing total monthly business income for self-employed individuals.
  
  
• Living expenses include food, clothing, utilities, and housing costs.
  
  
• Vehicle ownership and operating costs require disclosure, as they affect disposable income calculations.
  
  
• Monthly car payments and court-ordered child support must be listed with documentation.

The IRS evaluates these entries against its published Collection Financial Standards. These standards determine whether living expenses, transportation, and health care allowances are reasonable. Consistency between reported income, financial obligations, and supporting records builds credibility in the financial statement.

A detailed calculation of monthly income and expenses ensures that the IRS receives a fair representation of the taxpayer’s financial situation. Accurate figures strengthen eligibility for installment agreements or an Offer in Compromise and demonstrate responsibility in managing financial obligations. A transparent approach supports a smoother tax resolution process and increases the likelihood of an equitable outcome.

Fill Out Form 433 Step by Step

Completing IRS Form 433-A requires careful attention to every line. This guide walks through each section so you can fill out Form 433 confidently, accurately, and clearly. Keep recent statements and records on hand to support every figure in your financial statement.

Section 1: Personal Details

Enter basic personal details exactly as used on recent returns. Include your full legal name, current address, and Social Security number. List all household members who share living expenses, including dependents, roommates, or family contributors. If you received notices about a trust fund recovery penalty, indicate the circumstances where requested.

Section 2: Employment Information (Wage Earners)

Provide employer name, address, contact details, and start date. Report wage income using gross figures, then convert weekly or biweekly pay to monthly amounts. Attach recent pay stubs that match reported totals, and include withholding details. Disclose health insurance deductions, retirement contributions, and any court-ordered child support.

Section 3: Other Financial Information

Answer every question on lawsuits, liens, filed bankruptcy, and pending claims. List safe deposit box locations, contents, and access holders. Describe secured debts, including collateral, interest rate, payment amount, and remaining term. If you manage accounts in foreign countries, disclose institutions, balances, and currency.

Section 4: Personal Assets

Report all personal assets at fair market value and attach supporting documents. Include real estate, vehicles, life insurance policy cash value, and other personal assets: record vehicle ownership costs, vehicle operating costs, and monthly car payments. Calculate asset equity by subtracting secured debts from each item’s fair market value.

Section 5: Monthly Income and Expenses

Summarize every income source, including wage, business, rental, and benefits. Detail living expenses for housing, utilities, food, transportation, and health care. List other expenses that affect disposable income, such as child support or medical costs. Ensure totals match attached statements to preserve credibility.

Sections 6–7: Business Information (Self-Employed)

Self-employed individuals must detail gross receipts, monthly business income, and monthly business expenses. They must also provide business bank accounts, average monthly payroll, and descriptions of business assets. Equipment and vehicles must be valued at fair market value, and asset equity must be calculated. Any leases, secured debts, and credit limit terms that influence cash flow must also be included.

Certification and Submission

Read the perjury declaration, confirm accuracy, and sign in the required spaces. If a spouse shares household expenses, secure the second signature where instructed. Attach all schedules and proof that support your financial statement entries. Retain copies for records, and prepare for follow-up questions from the IRS.

Completing each line with care protects your credibility and prevents delays. Consistent numbers across bank statements, pay records, and receipts support the financial statement. Accurate disclosure supports eligibility for options such as an installment agreement, Form 433-A OIC consideration, or currently not collectible status. Maintain organized documentation to respond quickly if the IRS requests detailed financial information.

Installment Agreement and Form 433-A OIC

Two of the most essential collection alternatives supported by IRS Form 433-A are installment agreements and the Offer in Compromise. Both require detailed financial information about income sources, monthly expenses, and personal assets. The Internal Revenue Service evaluates this disclosure to decide whether taxpayers can commit to monthly payments or qualify for settlement through a reduced balance.

Installment Agreements

An installment agreement allows taxpayers to pay an outstanding tax liability in structured monthly payments. When balances exceed $50,000 or repayment terms extend beyond 72 months, the IRS requires a completed Form 433-A. The financial statement outlines wage income, business income, and secured debts to establish disposable income. Personal asset information, such as the fair market value of vehicles or real estate, may also influence payment capacity. The IRS calculates monthly payments based on living expenses and the taxpayer’s ability to maintain obligations without additional financial hardship.

Offers in Compromise (Form 433-A OIC)

Form 433-A OIC is designed for taxpayers seeking to settle their debt for less than the full balance. The IRS reviews asset equity by comparing fair market value to outstanding debts while considering monthly income and expenses. If disposable income is insufficient to cover the liability within the collection period, an Offer in Compromise may be approved. Eligibility depends on comprehensive disclosure, including life insurance cash value, business assets, and other personal assets. Financial hardship plays a central role in this evaluation.

Both installment agreements and Offers in Compromise require thorough documentation and precise reporting. A carefully prepared financial statement ensures the IRS can accurately evaluate taxpayers’ ability to pay. Complete disclosure of income, assets, and financial obligations improves the likelihood of reaching a manageable resolution.

Currently Not Collectible Status

The IRS may place a taxpayer’s account in currently not collectible status when repayment is impossible without causing financial hardship. Form 433-A provides the detailed financial information needed to establish this designation. The IRS evaluates monthly expenses, disposable income, and overall financial obligations to confirm that taxpayers cannot make meaningful payments toward the outstanding tax liability.

When It Applies

• Taxpayers who filed bankruptcy and are recovering from discharged debts may qualify if their income remains insufficient to cover basic obligations.
  
  
• Severe financial hardship, such as limited wage income or reliance on disability benefits, can justify CNC status.
  
  
• A tax balance far exceeding disposable income supports a finding that collection is temporarily infeasible.

IRS Considerations

• The IRS compares monthly income against monthly expenses to determine whether funds remain.
  
  
• A negative disposable income calculation strongly indicates that collection efforts would create hardship.
  
  
• Asset equity in personal or business assets is reviewed to confirm that liquidation would not cover the liability.

How to Request

• Submit a completed financial statement that includes personal assets, business income, secured debts, and living expenses.
  
  
• Provide documentation supporting claims of financial hardship, including medical bills, child support orders, or proof of unemployment.
  
  
• Attach records of business bank accounts, gross receipts, and monthly business expenses if self-employed.

Role of the Taxpayer Advocate Service

• The Taxpayer Advocate Service may assist taxpayers who encounter difficulty establishing CNC status.
  
  
• This independent body reviews cases where collection would create unfair financial consequences.

The not collectible status currently provides temporary relief for taxpayers experiencing severe financial hardship. The designation does not erase the tax balance but ensures that immediate collection actions pause. A clear financial statement and consistent updates to the IRS maintain eligibility for this temporary relief.

Common Errors and How to Avoid Them

Completing IRS Form 433-A requires accuracy and thoroughness. Even minor mistakes in reporting financial information can delay the review process or result in rejection of relief requests. Recognizing frequent errors and applying corrective strategies strengthens the financial statement and ensures the IRS receives reliable data.

• Failure to list personal assets: Some taxpayers omit real estate, vehicles, or other assets such as jewelry or safe deposit box contents. Always include these details at fair market value, supported with documentation, to prevent questions about asset equity.
  
  
• Overlooking business income: Self-employed individuals may underreport gross receipts or fail to disclose rental income tied to business activity. Provide complete figures for monthly business income and attach records such as invoices, bank statements, or deposit slips.
  
  
• Excluding life insurance policy cash value: Whole life insurance policies contain a cash value that must be disclosed. State the policy number, insurer, current value, and any outstanding loan against the policy.
  
  
• Misstating monthly business expenses: Inaccurate payroll, utilities, or rent figures may distort disposable income. Use consistent records and ensure that average monthly payroll and recurring expenses align with bank statements.
  
  
• Not reconciling disposable income with monthly payments: Disposable income calculations must match proposed monthly payments under an installment agreement. Submitting inconsistent figures undermines credibility and can result in IRS rejection.

A thorough review of each section before submission reduces the risk of errors and supports timely processing. Taxpayers should cross-check reported information with supporting documents, such as pay stubs, financial statements, and loan records. 

Correcting inconsistencies in advance demonstrates cooperation and helps the IRS evaluate financial hardship more efficiently. Accurate completion of Form 433-A supports a smoother tax resolution process and enhances the likelihood of approval for relief options.

Frequently Asked Questions

How does Form 433-A help manage tax debt?

Form 433-A provides the Internal Revenue Service with detailed information about income, expenses, and personal assets. This financial statement allows the IRS to assess taxpayers' ability to pay and determine suitable relief options. Properly completed forms can lead to payment arrangements such as installment agreements or an Offer in Compromise. Accurate disclosure ensures that tax debt is reviewed fairly and repayment terms reflect the taxpayer’s financial situation.

What is a partial payment installment agreement?

A partial payment installment agreement is a type of payment plan that allows taxpayers to pay a portion of their tax debt through monthly installments. The IRS reviews the financial statement on Form 433-A, including disposable income, secured debts, and asset equity, to decide whether a reduced arrangement is appropriate. This option is generally approved when the taxpayer cannot fully repay the liability before the collection period expires.

Do self-employed individuals report self-employment income differently?

Yes, taxpayers with self-employment income must complete additional sections of Form 433-A, covering gross receipts, monthly business expenses, and business bank accounts. Detailed information about payroll, rent, and utilities must also be disclosed. Revenue officers use these figures to separate personal finances from business operations. Accurate reporting of self-employment income ensures the IRS receives a complete financial picture and can evaluate repayment capacity appropriately.

How does a revenue officer use the form?

A revenue officer reviews Form 433-A to determine the taxpayers' ability to pay, confirm financial hardship, or recommend enforcement actions. Detailed information on income, expenses, and assets allows the officer to evaluate repayment options, including installment agreements or an Offer in Compromise. The revenue officer also verifies supporting records, such as pay stubs, bank statements, or business receipts, to ensure the financial statement is complete and accurate.

Are digital assets required on Form 433-A?

Yes, the IRS requires taxpayers to disclose digital assets, including cryptocurrency and non-fungible tokens, as part of the financial statement. Taxpayers must report fair market value, wallet details, and associated debts. Digital assets are considered personal assets and may influence an installment agreement or Offer in Compromise eligibility. Providing accurate, detailed information about digital holdings prevents disputes and supports a transparent evaluation of repayment ability.

Why is detailed information essential on Form 433-A?

Providing detailed information enables the IRS to evaluate financial hardship accurately. Omissions, such as leaving out secured debts, digital assets, or monthly business expenses, can result in rejection of relief requests. Revenue officers rely on precise disclosure of wage income, self-employment income, and personal assets to confirm repayment capacity. The more comprehensive the financial statement, the greater the likelihood of receiving a fair resolution to tax debt issues.

Can Form 433-A establish a payment plan?

Yes, Form 433-A provides the data the IRS needs to establish a payment plan tailored to the taxpayer’s financial capacity. The form outlines monthly income, necessary living expenses, and available asset equity. This information helps determine whether a standard installment agreement, a partial payment installment agreement, or another resolution option is most suitable. A complete and accurate submission ensures payment terms match taxpayers' ability to manage tax debt responsibly.