Form 433-F: Comprehensive Guide For Tax Relief with IRS

Woman completing checklist for IRS Tax Relief Form 433-F

Form 433-F: (Collection Information Statement)

Set up Special Payment Plans and Get Relief from IRS Collection Actions

When the IRS needs to know more about your financial situation, the agency may request Form 433-F (Collection Information Statement). Depending on the circumstances, you may proactively complete this form to apply for an IRS program, or an IRS agent may request this form from you.

In either case, make sure you complete the form accurately and consider working with a tax professional to get the best results possible. To get help now, contact us at Wiggam Law today. In the meantime, keep reading for an overview of when to use this form, how to complete it, and when to hire a tax attorney for help.

IRS Form 433-F Definition

IRS Form 433-F is a collection information statement. The IRS uses this two-page form to gather financial details about taxpayers. The agency then considers those details and the taxpayer’s financial situation when making decisions about collection actions and payment plans.

This form collects detailed info about your assets (bank accounts, investments, real estate, etc.) and debts (credit cards, mortgages, car loans, etc.). It also asks about your income and monthly expenses. You may use it to apply for currently not collectible status, and in some cases, the IRS requests this form when you apply for a payment plan.

Who Should File Form 433-F?

You should file this form if you want the IRS to pause collection actions because you’re experiencing financial hardship. You may also need to file this form in certain situations when applying for a monthly payment plan. Here are more details on when to file Form 433-F:

  • To request currently not collectible status – If you want the IRS to stop collection actions against you, file this form to prove that you can’t afford to pay. If you qualify, the IRS will stop collection actions until your situation changes. Sometimes, the IRS may ask for an updated form every two years or so, but in other cases, the agency will keep you on uncollectible status until you file a tax return that shows a meaningful increase in your income.
  • To apply for payment plans on high levels of tax debt – If you owe over $250,000, you may need to file this form (or another IRS financial form, Form 433-A) when applying for a payment plan. In some cases, IRS employees may ask for this form on lower levels of tax debt.
  • To set up payment plans without direct debit – The IRS will require this form if you owe over $25,000 and don’t want to make your monthly payments through direct debit. Then, you will be able to mail in your payments every month or make them manually online. Generally, if possible, it’s easier just to set up direct payment so you can avoid the extra paperwork and hassle of remembering to manually make your monthly payment to avoid defaulting.
  • If you can’t afford the minimum payment on an installment agreement – Typically, when you set up payments, the IRS will ask you to pay off the tax debt within seven years. However, if you can’t afford the minimum monthly payments to make this possible, the IRS may reduce your total tax liability and monthly payment amount, but only if you file this form and prove that you can only afford to pay less.

There may be other situations where the IRS requests this form or similar types of financial statements. You should never lie to the IRS – that’s tax fraud. However, if you’re uncomfortable with an IRS request, you should contact a tax professional. They’ll be able to give you the best advice for dealing with the IRS.

How to Fill Out Form 433-F

Again, Form 433-F requires information about your assets, debts, income, and expenses. Here’s a checklist of the items you should gather to fill out this form:

  • Account number, balance, and bank name for all bank accounts
  • Account number and balance for retirement accounts, CDs, mutual funds, stocks, bonds, and other investments
  • Cryptocurrency details, including type, virtual wallet, email address associated with currency, location, and current value in U.S. dollars
  • Real estate details, including year purchases, purchase price, refinance details if relevant, current value, and balance owed
  • Description, current value, monthly payment, and balance owed for cars, boats, RVs, and other assets
  • Type, credit limit, balance owed, and monthly payments for all credit cards
  • Name of your employer
  • Frequency of paychecks
  • Amount of paychecks before and after taxes
  • When you were hired
  • The same details about the spouse’s employment
  • Other sources of income, such as alimony, child support, rental income, or pensions
  • All monthly expenses, including food, clothing, transportation, health insurance, housing costs, utilities, and others

Business owners also need the following details:

  • Name of business
  • Business EIN
  • Type of business
  • Number of employees (not counting the owner)
  • Accounts receivables (outstanding invoices) owed to you or your business
  • Info about credit card processing details

The 433-F form is relatively straightforward. It simply asks for numbers and doesn’t request any written explanations. However, that doesn’t mean there is no nuance to the process. The IRS has established guidelines for the expenses it expects people to have. Still, in some cases, you can convince the agency to adjust its guidelines based on your unique circumstances.

Allowable Expenses and IRS Financial Standards

As you fill out Form 433-F, you’ll see a long list of detailed expenses. The agency asks about every necessary expense, from groceries to gas to housekeeping supplies and personal care products. The form has two columns – one where you write your expenses and another where you note the IRS’s allowable standard.

The allowable standards vary based on where you live. For instance, if you live in Atlanta, the IRS assumes that you need to spend more per month on rent/mortgage than you do if you live in rural Kentucky. The agency also has different standards based on utility and transportation costs in different areas. However, food, housekeeping, clothing costs, and a handful of other expenses are standard regardless of where you live.

The IRS updates its collection financial standards every year, and you can check out the IRS’s website to get a sense of what the agency expects. For the most part, the agency only takes into account allowable expenses. For example, imagine that the agency thinks you should spend $1,000 on groceries per month, but you spend $1,500. The IRS will essentially want you to reduce that expense and spend the difference on your tax debt.

However, the IRS is aware that certain situations require people to spend more than average. For instance, you may have higher medical costs due to an illness, higher food costs due to an allergy, or higher costs in other categories for other compelling reasons. In these cases, you must proactively explain why your expenses exceed the allowable standard and why the agency should increase the threshold in your situation.

Regardless of popular opinion, the IRS can be reasonable. Say your housing expenses are a couple hundred more than the allowable threshold. In this case, the IRS isn’t going to demand that you sell your home and look for somewhere with a slightly lower mortgage. That would be an absurd amount of effort for a few hundred dollars. That said, however, the agency can also be fairly strict. If it looks like you could take a loan against the equity in your home to pay off your tax debt, the agency may tell you to do that.

When to Contact a Tax Attorney

Form 433-F is just two pages long. Should you tackle it alone or call a tax attorney for help? Ultimately, you should decide based on your comfort level and the amount of money at stake. Here are some situations when you should contact a tax attorney for help:

  • You’re not sure if you should file Form 433-F
  • The IRS has requested Form 433-F, but you’re not comfortable sharing that level of detail
  • You want to file Form 433-F but aren’t sure how
  • You want a payment plan for a significant tax debt, but you’re not sure if you should apply for tax forgiveness instead
  • You want the lowest monthly payments possible on your monthly payment plan.
  • You can’t afford to pay your tax debt, but your expenses exceed the IRS’s allowable standards
  • The IRS is currently garnishing your wages or threatening to levy your other assets

Not sure what to do? Then, contact a tax attorney for help. The IRS has many different payment plans and relief options for people who need to catch up on tax debts, but because there are so many options, it can be hard to navigate the process on your own. A tax attorney can answer your questions and help you deal with the IRS.

Contact the Experienced Tax Attorneys at Wiggam Law

Dealing with tax debts can be incredibly stressful, but luckily, there is a solution. Our team of experienced tax attorneys deals with the IRS and state tax agencies daily. They can review your unique tax problem and help you find the most effective, affordable solution.

Ready to get help? Then, call us at (404) 233-9800 or fill out our online consultation form to speak with a Wiggam Law team member today.

Related Tax Forms

There are several different Form 433 forms, as well as other forms related to payment plans. Here are some of the related tax forms:

  • 433-A (Collection Information Statement for Wage Earners and Self-Employed Individuals)
  • 433-A (OIC) – Same as above but used when applying for an offer in compromise
  • 433-B (Collection Information Statement for Business Owners)
  • 433-B (OIC) – Same as above but used when applying for an offer in compromise
  • 433-D (Installment Agreement) – Used to finalize installment agreements and set up direct debit payments
  • Form 9465 (Installment Agreement Request) – Used to apply for installment agreements, may require you to attach Form 433-F