You may need to complete the IRS 433-B form, Collection Information Statement for Businesses, when your business owes federal tax and can’t pay it off. These forms are basically requests to the IRS to create an installment plan for the taxes owed, whether for a hardship or alongside an offer in compromise.
Form 433-B is a precursor to the 433-D Installation Agreement. Keep in mind that IRS 433-B is different than 433-B (OIC), though they are both business collection information statements. This guide will cover what IRS 433-B is and provide a detailed look at the five sections you’ll need to fill out.
When You May Need Form 433-B
Form 433-B is for businesses, not individuals, and allows you to request a payment agreement with the IRS. There are a couple of different scenarios that warrant Form 433-B:
- Requesting an installment agreement with the IRS to set up tax payments
- Requesting non collectible status due to financial hardship, which delays your tax obligation
Form 433-B (OIC), on the other hand, is used for a compromise or settlement with the IRS if you are a corporation, partnership, limited liability company (LLC) classified as a corporation, or other LLC. Both forms are six pages long, but the sections vary. Note that sole proprietorships need to complete Form 433-A (OIC) instead. IRS Form 433-B (OIC) should only be used with Form 656, Offer in Compromise.
IRS Form 433-B has five main sections, and they appear quite lengthy when you first view the document. Walking through them step by step will help you understand your tax obligations and avoid feeling overwhelmed.
The 5 Sections of IRS Form 433-B
IRS 433-B is a pretty involved form, and you’ll need detailed information about your business, partners, and finances to complete it. Some sections are more straightforward than others, but let’s walk through each one so you know exactly what you’re doing:
Section 1: Your Business Information
The first section is where you record your basic info. It asks for your name, address, what kind of business you are, and your employee ID number. It also asks for your payment processor (such as PayPal or Google Checkout) and what credit cards you accept as a business.
You will also need your merchant account number and issuing bank information, so you may have to find one of your digital files to get those details. You’ll also need to create an attachment to the form if you accept Discover, Diner’s Club, or any other card.
Section 2: Business Personnel and Contacts
You must next report who your business partners are. These might be actual co-owners, silent partners, officers, LLC members, or major shareholders. Anyone who has a say in how you run your business goes here, whether they’re foreign or domestic.
The form gives you space for four people, so you’ll have to attach a list if you have more. You will need your partners’ contact information and their official title, and then answer if they are responsible for payroll deposits or taxes. You will also need their taxpayer ID number, how much of your company they own in shares and percentage, and their annual salary or draw.
Section 3: Other Financial Information
Section three of Form 433-B is where you’ll list financial information that may warrant a few applicable document attachments. The IRS essentially wants to know how you’re functioning as a business entity. Here’s the info needed:
- You will need to list any payroll service provider or reporting agent, their address, and the date you began to use them
- Answer whether the business is a party to a lawsuit
- Other questions ask about any bankruptcies, transferred assets, subsidiary status, and monies owed to your business by involved parties
- Lastly, the form asks whether you anticipate any increase or decrease in income and if you are a federal contractor
There are several yes or no questions, and if your answers are no, then you’re essentially done and can move on to Section four. Yes, answers require filling out more details. It may take a little time to gather this information, so be prepared.
Section 4: Business Asset and Liability Information (Foreign or Domestic)
Section four is the longest section. It requires more detail than you’ll likely know off the top of your head, including:
Cash on Hand
This is the cash in your petty cash, in the cash register, and stashed away in your safe. Add it all up and record it here. Do not include anything you have in the bank. Then, list the contents of your safe if you do have one, listing descriptions like cash, bonds, keys, etc.
Business Bank Accounts
List these even if you have nothing in them. This means brick-and-mortar banks, online banks, or safety deposit boxes. Select the type of account, the account’s full name, address, account number, and balance as of the date you’re completing the form.
Accounts and Notes Receivable
This is a subsection where you’ll list any federal government contracts or other business contracts. You will need all names and addresses, contact information, status (for example, age), date due, invoice number or government grant/contract information, and amount due. Tally the outstanding balance at the end of your list.
Investment Assets
These include stocks, bonds, mutual funds, CDs, commodities, virtual currency like bitcoin, and stock options.
Available Credit
This is an easier subsection where you list your lines of credit and credit cards. List full names, addresses, and contact info as usual. Be prepared to look at your latest statements to get your credit limits, what you owe, and your available credit. Total everything up.
Real Property
This is where you list property such as vehicles, business equipment, and intangible assets, which are those that are not physical, including logos, licenses, patents, domain names, trade secrets, trademarks, and copyrights. Include what you already own, what you’re leasing, and all the lenders involved. Be prepared to list specifics like vehicle mileage and tag numbers.
It can be challenging to come up with this info, so if you’re struggling with any part of this process, it’s a good idea to consult with a tax professional to simplify the process.
Section 5: Your Monthly Income and Expense Statement
Section five is where you’ll report your income and expense statement, which you probably already generate monthly, quarterly, or annually. It includes your gross receipts, rental income, interest income, dividends, cash receipts, and miscellaneous income, like referral fees.
Your expenses are the costs of carrying out your business. This doesn’t include nonbusiness expenses like depreciation or bad debt. You also need to indicate whether your business uses the cash or accrual accounting method in Section five.
Recording all this business information can be a lot of work, so be ready to spend a bit of time on IRS 433-B. Understanding everything you need will help you prepare more efficiently and get it done faster. Your other option is to work with a tax professional who can explain everything to you in more detail.
Turn to Silver Tax Group With Questions about IRS Form 433-B
IRS Form 433-B is pretty straightforward but requires assembling lots of business info. Remember that Form 433-B differs from other collection information statements, like Form 433-A, Form 433-F, and Form 433-A (OIC), which are for individual taxpayers. You never want to make mistakes with these forms, so talking to the tax experts at Silver Tax Group is your best bet when you need to make a request to the IRS for your business.
Our diverse team of tax attorneys has had countless successes in helping clients who are having trouble with the IRS. Reach out to our tax professionals to speak to an expert about Form 433-B or paying business taxes.
