If you own a business with an outstanding liability and an IRS revenue officer is assigned to your case, you will most likely be asked to complete Form 433-B before setting up a payment plan. This form asks for information about your business and finances to help the IRS determine what you can pay and whether you qualify for an installment agreement. Have you been asked to complete Form 433-B and don’t know where to begin? Here’s everything you need to know about Form 433-B and how to complete this tax relief form. To get help with your unique situation, reach out to our business tax attorney today.

What is Form 433-B?

Form 433-B is a collection information statement that is used to report financial information to determine a business’s position to satisfy an outstanding tax liability. If your business owes taxes and cannot pay, you can use Form 433-B to:

• Request an installment agreement
• Request a temporary delay in tax payment
• Request an offer in compromise (Form 433-B (OIC))

Form 433-B is intended to help businesses, such as S-corporations and C-corporations, report their income, expenses, and assets. The IRS then uses this information to determine whether your business is eligible for an installment agreement, temporary delay, or other relief.

How to Complete Form 433-B

The following sections explain the information you need to complete this form. Check out the lists below and gather your info before you start the form. Or contact a tax attorney to guide you through the process.

Section 1: Business Information

The first section of Form 433-B requests your business information. This section is broken into six subsections: 1. Your business contact information. This includes:

• Your business name
• Business street address
• Business telephone
• Type of business
• Business website

2. This subsection asks for your:

• Employer identification number
• Type of business entity (e.g. partnership, LLC, etc.)
• Date the business was incorporated/established

3. Your employee information, including:

• Number of employees
• Monthly gross payroll
• Frequency of tax deposits
• If the business is enrolled in Electronic Federal Tax Payment System (EFTPS) (check yes or no)

4. Business e-commerce information. If your business engages with online sales, check yes and complete 5a and 5b. If it doesn’t, check no and skip to subsection 6. 5. Payment processor information for e-commerce businesses. For this section, you will need to provide the details of any payment processors you use for your online sales (such as PayPal). You will need to provide the name and address of the provider, along with your payment processor account number. 6. Credit cards accepted by your business. This includes:

• Type of credit card (e.g., Visa, Mastercard, etc)
• Merchant account number
• The issuing bank’s name and address

Section 2: Business Personnel and Contacts

In this section, you will need to provide full contact information for each partner, officer, LLC member, and major shareholder. For each person, you will need to provide:

• Full name
• Title
• Home address
• If they are responsible for depositing payroll taxes (check yes or no)
• Taxpayer identification number
• Home and work telephone numbers
• Percentage of ownership and shares or interest
• Annual salary/draw

Section 3: Other Financial Information

This section asks about certain business-related issues in order to determine whether the business gave owners money that could have been used to pay taxes. Here’s what you will need to answer: 1. Does the business use a Payroll Service Provider or Reporting Agent: This includes any providers that assist with or assume all aspects of your business’s payroll, or an authorized reporting agent (such as an accounting service). If you check yes, provide the name and address of the provider/reporting agent, and the effective date. 2. Is the business a party to a lawsuit: If the business is directly involved in a lawsuit, either by suing or being sued, you will need to check yes and provide:

• Whether the business is the plaintiff or defendant
• Amount of suit
• Location of filing
• Possible completion date
• Who the business is represented by
• Subject of the suit
• The docket/case number

3. Has the business ever filed for bankruptcy: If you check yes, you will need to provide:

• Date the bankruptcy was filed
• Date the bankruptcy was dismissed
• Date the bankruptcy was discharged
• Petition number
• District of filing

4. Do any related parties have outstanding amounts owed to the business: This includes any officers, partners, and employees. If you check yes, you will need to provide:

• Name and address of the person with outstanding amounts
• Date of the loan
• Current balance
• Payment date
• Payment amount

5. Have any assets been transferred from this business for less than full value: If you check yes, you will need to provide:

• List asset
• Asset value at the time of the transfer
• Date the asset was transferred
• Name of the person/business/entity the asset was transferred to

6. Does this business have any other business affiliations: This includes subsidiaries or parent companies. If you check yes, you will need to provide:

• The name and address of the related business
• The related business’s employer identification number

7. Any increase/decrease in income anticipated: If you check yes, you will need to provide:

• Summary of the increased/decreased income expected
• How much it is expected to increase/decrease
• When it’s expected to increase/decrease

8. Is the business a Federal Government Contractor: Has the business entered into a contract with any agency or department of the U.S. government? If you check yes, you will need to provide information in the following section (more on that below). If you have checked yes for any of the above questions, you will also need to attach copies of any documents that support your answers.

Section 4: Business Asset and Liability Information

This section requests your business assets and liability information, including real estate and investments. This section is broken into nine subsections: 1. Current business cash earnings, including:

• Total cash on hand (not in the bank)
• If there is a safe on your business premises, and its contents

2. Business bank accounts. This includes both online and mobile banking accounts, savings accounts, checking accounts, money market accounts, and stored value cards. You will need to provide:

• The type of business account (e.g. PayPal)
• Name and address of the bank, financial institution, credit union, etc.
• Business account number
• The account balance

At the bottom of this section, include the total amount of cash in all banks/accounts. 3. Accounts/notes receivable. This includes e-payment accounts and factoring companies. If you stated in section 3 that the business is a Federal Government Contractor, you will need to include details of the federal government contract/s here also. You will need to provide:

• The name and address of the receivable
• Status of the receivable
• Due date
• Invoice number/government grant or contract number
• Amount due
• Total amount due from all receivables

4. Investments. This includes any stocks, bonds, commodities, and virtual currencies. You will need to provide:

• Name and address of the company/investment
• Check yes or no if the investment was used as collateral on loan (used to secure a loan)
• Current value
• Loan balance
• Equity amount

5. Available credit, including credit cards. You will need to provide:

• Name and address of credit issuer, such as a bank or credit union
• Account number
• The credit limit
• The amount of credit owed
• Available credit

6. Real property. You will need to include all property and land contracts of the business, including rentals, leases, and ownership. You will need to provide:

• Description of the property
• Purchase/lease start date
• Current loan balance
• The amount you pay monthly for the property
• Date of final payment
• Equity
• The property’s address
• The name and address of the property’s lender/landlord/lessor

7. Business vehicles leased/purchased. You will need to provide:

• Year the vehicle was manufactured
• Make/model of the vehicle
• Mileage
• License/tag number
• The Vehicle Identification Number (VIN)
• Purchase/lease start date
• Current fair market value of the vehicle
• Current loan balance
• How much you pay monthly for the loan
• Date of the final payment
• Equity
• The name and address of the lender/lessor

8. Business equipment and intangible assets, including machinery, equipment, and merchandise inventory. You will need to provide:

• Description of the asset
• Purchase/lease start date
• Current loan balance
• How much you pay monthly for the loan
• Date of the final payment
• Equity
• The name and address of the lender/lessor
• The address of the asset’s location

9. Business liabilities, including notes and judgments not previously stated on the form. You will need to provide:

• Description of the business liability
• Whether the liability is secured/unsecured
• Date pledged
• Balance owed
• Date of the final payment
• Payment amount

Section 5: Monthly Income/Expense Statement for Business

The final section concerns the business’ monthly income and expenses. For this section, you will need to provide:

• The accounting method used (cash or accrual)
•  The time period of your income and expenses

Next, you will need to list your monthly income sources and gross monthly income, including:

• Receipts from sales/services
• Rental income
• Interest
• Dividends
• Cash receipts
• Other income

Finally, list your monthly expense items and costs, including:

• Materials – items used to produce/create your product or service.
• Inventory – items bought for resale.
• Wages and salaries for all employees
• Rent for the business’s property
• Supplies – items purchased to conduct business, such as office supplies, books, etc.
• Utilities – including gas, electricity, business telephone, water, etc.
• Vehicle gas/oil used for business purposes
• Repairs and maintenance for business property
• Business insurance
• Current taxes – such as real estate, state, and local income taxa.
• Other expenses

The Different Types of Form 433

There are several versions of Form 433, each for different purposes. Here’s a breakdown of each form and when you need to use them:

• Form 433-A: This form is intended for individual wage earners and self-employed individuals with outstanding tax liabilities who want to obtain an installment agreement or currently non-collectible status. If your case is assigned to a revenue officer, they will most likely request Form 433-A to determine your ability to settle your outstanding tax liability. However, if you owe under a certain amount or haven’t been assigned a revenue officer, you may be able to set up a payment plan without filing this form.
• Form 433-B: As noted above, Form 433-B is for S-corporations, C-corporations, partnerships, and some LLCs that want to obtain an installment agreement or currently non-collectible status. Typically, if your case is assigned to a revenue officer, or, in some cases, ACS, you will need to complete Form 433-B.
• Form 433-F: This form is a simplified version of Form 433-A and is the most commonly used collection statement. If you owe more than $50,000 and don’t qualify for an installment agreement, or can’t afford to pay anything at all, the IRS may request this form to determine your eligibility for a payment plan or currently non-collectible status.
• Form 433-H: If you are a wage earner with an outstanding tax liability exceeding $50,000 or are unable to pay your entire tax debt within 72 months, you can use Form 433-H to request an installment agreement.
• Form 433-A (OIC): If you are an individual or business, and want to settle your tax debt through an offer in compromise, you will need to use Form 433-A (OIC). Note this form is a bit different than Form 433-A.
• Form 433-B (OIC): If you are an S-corporation, C-corporation, or partnership, and want to settle your tax debt through an offer in compromise, you will need to use Form 433-B (OIC). Again, this form varies slightly from the other 433-B form.

There is also Form 433-D. This form doesn’t collect financial details in the same way as the above forms. Instead, you use it to set up direct debits once you have been approved for a payment plan.

Alternatives to a Payment Plan

If a payment plan isn’t suitable for you or your business, or you are currently unable to pay the full amount owed, you can also use Form 433-B to request a currently non-collectible status. This option allows you to pause collection actions by the IRS until you are in a better financial situation to pay back what you owe. Alternatively, you can use Form 433-B (OIC) to request an offer in compromise. This agreement allows you to settle your tax debt for less than you owe. Generally, this option isn’t available to taxpayers who are able to take care of their tax debts through other means, e.g. through a payment plan. However, if you are unable to repay the full amount owed, or unable to enter another payment agreement, the IRS may consider an offer in compromise to help settle your tax debt.

When to Consider Talking to a Professional

When your business has outstanding tax liabilities and has been assigned to a revenue officer, you will most likely have to complete Form 433-B. Form 433-B requests a full breakdown of your business’s financial situation, including monthly income and expenses, investments, and liabilities. Therefore, it’s crucial to ensure that all information sent on the form is accurate and is supported by applicable documents. Support from a tax professional can ensure that your Form 433-B is completed accurately and in compliance with IRS requirements. A tax pro can also help you request penalty abatement and ensure you’re taking the best route forward with your tax obligations. If you have to complete Form 433-B and have questions regarding IRS compliance, contact Seattle Legal Services, PLLC at 206-536-3152 today.