Background and purpose

Form 433-A exists to give the IRS a standardized view of an individual’s financial picture so agents can evaluate reasonable collection options. The form is used most often when the IRS needs more than a simple payment plan — for example, to decide a partial‑payment installment agreement or to evaluate an Offer in Compromise (OIC). (See IRS, Offer in Compromise: https://www.irs.gov/individuals/offer-in-compromise.)

How Form 433-A differs from other collection forms

  • Form 433-A (Collection Information Statement for Wage Earners and Self‑Employed Individuals) collects detailed monthly income, expenses, asset values and liabilities.
  • Form 433-F is a shorter, more general financial statement used in many collection cases; it’s less detailed than 433-A for monthly expense reporting.

When the IRS will ask for it

  • When you apply for an Offer in Compromise (often paired with Form 656).
  • When you request a partial‑payment installment agreement or the IRS needs a full financial review.
  • When the taxpayer claims financial hardship that affects collection. Note: many standard installment agreements can be set up online without Form 433-A, but the IRS will request 433-A if it needs a detailed financial analysis (IRS, Collection Financial Standards: https://www.irs.gov/businesses/small-businesses-self-employed/collection-financial-standards).

What the IRS asks for (key sections)

  • Personal information and dependents.
  • Monthly income: wages, business income, benefits, rental, investment income.
  • Monthly living expenses: housing, utilities, transportation, food, child care — often compared to IRS National Standards.
  • Assets: bank accounts, vehicles, real estate, retirement accounts and business assets.
  • Liabilities: mortgages, loans, taxes owed, and other debts.

Step-by-step checklist to complete Form 433-A

  1. Gather documents: 3 months of bank statements, pay stubs, profit/loss for self‑employment, loan statements, and current bills.
  2. Use the IRS Collection Financial Standards to classify allowable expense items (some items are standardized). (See: https://www.irs.gov/businesses/small-businesses-self-employed/collection-financial-standards.)
  3. List assets and use realistic, documented values; don’t undervalue retirement accounts or property.
  4. Double‑check math and attach supporting docs (bank statements, promissory notes, paystubs).
  5. Keep a copy and send certified mail if filing a paper packet.

Practical tips from experience

  • Be complete and transparent: I’ve seen cases where missing bank statements or unreported income delayed negotiations for months. Accurate documentation speeds resolution.
  • Use conservative valuations: The IRS may discount subjective values (e.g., “market value” claims without comps).
  • Don’t omit allowable monthly expenses: If you can document legitimate outlays (childcare, medical costs), include them — they can lower your net monthly available cash.
  • If self‑employed, prepare a year‑to‑date profit/loss and reconcile cash flow to personal withdrawals.

Common mistakes to avoid

  • Underreporting income or assets to appear more needy — the IRS verifies bank deposits and will flag inconsistencies.
  • Forgetting to list cosigned debts or personal business liabilities.
  • Failing to attach required supporting documentation (bank statements, loan statements, proof of expenses).

Real‑world example (illustrative)

A sole proprietor I worked with had variable monthly receipts and used business deposits to pay both business and personal bills. By preparing a clear profit/loss statement, reconciling bank deposits, and listing allowable personal expenses, we negotiated a partial‑payment agreement the IRS accepted — versus an outright denial when the initial packet was incomplete.

How the IRS uses Form 433-A in decisions

The IRS compares reported living expenses to their collection standards and calculates “monthly disposable income.” That disposable income and net realizable equity in assets determine whether the IRS will accept a payment plan, request higher payments, or consider an OIC. For Offers in Compromise, the IRS applies its established reasonableness tests and may request additional documentation. (See: https://www.irs.gov/individuals/offer-in-compromise and related guidance.)

Links to deeper guidance on FinHelp.io

Frequently asked questions

Q: Can I submit Form 433-A online?
A: No. Form 433-A is generally submitted as part of a paper packet or requested by the IRS during collection. Some collection options and installment agreements can be handled online without 433-A, but a full financial statement requires paper submission and supporting documents. (IRS guidance.)

Q: Will the IRS seize my assets if I file Form 433-A?
A: Filing 433-A is a disclosure tool, not an automatic trigger for seizure. The IRS uses the information to decide collection options. However, if the IRS finds undisclosed assets or income, collection actions can follow.

Professional disclaimer

This article explains Form 433-A for educational purposes and does not replace personalized tax advice. For decisions that affect your tax liabilities, consult a qualified tax practitioner or attorney. In my practice advising taxpayers, careful documentation and honesty on Form 433-A materially improve outcomes.

Authoritative sources

Last reviewed: 2025. Rules and IRS forms change; verify current filing instructions on IRS.gov.