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Why You May Need to File a 433-D Installment Agreement
If you’re still in business and fighting collections, all is not lost. You may still be able to file a 433-D in certain cases. Those revenuers, aka, the powers-that-be, will review individual cases and let you know if you can file. If approved, the IRS will send out a notice alerting you to submit Form 433-D during the collection process.
Other Forms to File Before a 433-D Installment Agreement
Buckle your seatbelts, we’ll make life easy. First, you must file Form 9465 which is the actual request to file an installment agreement. If you’ve filed the 9465 form, the IRS will already have viewed your already filled out Form 433-A or Form 433-F, which have your financial information on them.
It’s important to understand the terms of any document you submit, though — especially if it’s going to impact a tax debt repayment schedule.
It is only when your information has been reviewed and approved that you can finally fill out and submit IRS 433-D. Okay, enough forms and numbers, let’s get to the terms and agreements.
433-D’s Terms and Agreement FAQs
Most people groan at fine print legalese, so we’ve made the Terms and Agreements section of the 433-D agreement easy to digest. Once you complete and submit the 433-D, the taxpayer—that’s you—agrees to these (layman’s) terms:
Once you file 433-D, the agreement will remain in effect until you pay off what you owe—in full—including penalties and interest. If the statute of limitations (the length of time you can legally pay your debt) expires, this agreement will no longer be in effect.
Currently, the statute of limitations for the IRS to collect your debt is 10 years, although it can be extended. If your installment agreement is terminated, you will receive written notice from the IRS prior to the termination.
The IRS expects payment by the due date. That’s the monthly due date on the agreement. If you can’t make your payment as scheduled, contact them immediately if not sooner.
If your current financial condition changes, this agreement may change accordingly. Your current financial condition does not mean your current financial situation. Situations can change by the day. Your financial condition is longer-term. That’s the difference between getting a $1000 rebate one week and getting a new long-term contract the next.
You have to provide updated financial information whenever it is requested. This updated information may mean either a modification of or a termination of the 433-D agreement if your financial condition has significantly changed.
Note: You still must file federal returns.
Uncle Sam will apply any federal tax refunds or overpayments to your balance, including the shared responsibility payment under the Affordable Care Act. However, this has been reduced to zero for your 2019 taxes under the Tax Cuts and Jobs Act which took effect on December 31, 2018.
Your federal tax refund offset will continue each year until your debt is marked paid in full or until the mandatory collection period has expired.
User fees are the fees the IRS collects to provide a service. It is legal and it is the law. User fees are reviewed every couple of years. Currently, the IRS will deduct a $225 user fee from your first installment payment unless you qualify as low-income. Low income is defined as at or below 250 percent of the Federal poverty guidelines. If you qualify, your user fees are reduced to $43. Direct debit users pay $107.
Auto-debits make for less paperwork, which is why you get a reduced fee. The $43 user fee will be waived if you agree to send your payments electronically. You have to fill out the Direct Debit section of 433-D with your banking information before you turn in your agreement.
What Happens if You Default on Your Installment Agreement?
Reasons the IRS May Terminate an Installment Agreement
What to Know about Making 433-D Installment Payments
IRS Form 433-D Instructions
This will be the form number for the type of tax you owe, tax periods you owe, total amount owed, how much you’re going to pay as an initial payment, how much you’re going to pay per monthly installment, and when you intend to start paying it.
You can also choose a day of the month when you would like your additional payments to be made, which is when the direct debit will occur or the date by which checks need to be received. If you have agreed to any payment increases or decreases as time goes on, you will also make note of these on the provided lines.
Direct Debit Information
Initial and Signature
Where to Mail IRS Form 433-D
After you check to ensure you’ve filled out the form completely, send it to the address on your form in the “For Assistance” box or as indicated in the letter that came with your form.
You may call the number in the “For Assistance” box if you’re unsure about where to send it, but it is a good idea to send Form 433-D via certified mail so you can track its travels and arrival.
It can take up to two months for the IRS to set up the direct debit process. You may need to pay your first couple of payments by check.
Note: When Paying via Check
The Bottom Line: IRS 433-D Installment Agreement
If you owe more than $25,000 in taxes or collections, it may be in your best interest to file an IRS Form 433-D installment agreement to get you or your company back into the IRS’s good graces. Filing may keep your small business lien-free, for example, and may enable you to legally and manageably pay down your tax debt.
Contact Silver Tax Group today to speak with an expert about the IRS Form 433-D and whether it’s the right choice for you.
Need to File IRS Form 433-D?
We’ll discuss your current financial situation and put a plan together to help you file the required forms and documents to get you in good standing with the IRS.