Comprehensive Review of Form 433B – Collection Information Statement for Businesses

Comprehensive Review of Form 433B – Collection Information Statement for Businesses

Businesses that owe tax to the Internal Revenue Service, whether the tax is corporate income tax, 941 employment taxes, unemployment taxes or otherwise will likely need to complete Form 433B to propose and formalize an agreement with the Internal Revenue Service. Below is a comprehensive review of Form 433B, the form used to assess a business’s ability to pay a tax debt or tax liability. If you are an Ohio-based business facing a tax liability issue, get in touch with the tax lawyers at the McGuire Law Firm to find an equitable and speedy resolution. 

What is Form 433B?

Form 433B is titled, “Collection Information Statement For Businesses” and is just that.  Form 433B is a business financial statement that is completed at the request of the IRS or when a business is attempting to resolve a tax debt.  The intent of the form is to provide enough information related to a businesses income, net income, assets, equity in assets, accounts receivable and other related information to analyze the businesses financial wherewithal to resolve an outstanding tax debt or tax liability.

What Information is Reported on Form 433B?

First, Form 433B requires general information regarding the taxpayer such as the business name, business address, employer identification number, type of business, business website, the businesses number of employees, average payroll for the business and other information.  Thereafter the form requests information related to the business owners such as the name, address, social security number, percentage of ownership of each individual and their wage or distributions from the business.  The form also requires detailed information on the businesses assets such as bank accounts, investments, accounts receivable, real estate owned by the business, vehicles owned by the business and other business assets such as equipment, tools or any other assets owned by the business.  The business liabilities and debts are also accounted for on Form 433B, which may lead towards the assets of the business being encumbered if the debts or liabilities of the business are secured by the business assets.  After the business reports its assets in detail, the business must report business income and expenses.  Total or gross receipts are reported and then the businesses expenses are stated on a monthly basis.  The income and expenses are reported on a monthly basis because that allows the IRS to see what the businesses ability to make a payment on a monthly basis is.  

Do You Attach Documents to Form 433B or Provide Additional Documents With Form 433B?

Yes.  Depending upon the assets reported you would attach statements or documents to verify the assets.  For example, for any bank account you would attach the most recent 6 months bank statements.  If the business owned real estate or vehicles, you would attach the most recent mortgage statement or payment statement for the vehicles stating the total amount due on the loans and the monthly payment.  Additionally, the business would attach any loan documents to verify other debts or obligations of the business.

Who Does The Business Submit Form 433B To?

Generally business debts, especially 941 employment tax debts are collected or handled by a revenue officer within the IRS.  Thus, the business would generally be submitting Form 433B and all attachments to Form 433B to the revenue officer.  Under certain circumstances, the business may submit Form 433B to IRS automated collections.

Does The Business Submit Any Proposal For An Agreement With Form 433B?

Generally speaking, yes.  If you are attempting to resolve the businesses tax debts with an installment agreement, you would submit a formal installment agreement proposal when submitting the Form 433B.  The installment agreement proposal would include the monthly amount you are proposing to pay, the date of the month you are proposing to make payment and if the agreement is to increase, at what date will the agreement increase and to what dollar amount.

What If The Business Fails To Provide Form 433B When Requested?

If the business fails to provide Form 433B, the business is likely to be subject to enforcement action such as bank levies or the seizure of assets.  Many IRS revenue officers will be patient or give extensions of time to produce the 433B but eventually the failure to produce the form and information will lead to collection action. 

If My Business Circumstances Have Changed Can I Resubmit an Updated 433B?

Yes.  If your business has had a material change in income or other financial factor, you could speak with the revenue officer or IRS collections about submitting an updated Form 433B to capture the businesses current financial picture and circumstances.  If an agreement has already been finalized with a revenue officer and the revenue officer no longer has the file so to speak, you may need to contact the IRS and inquire as to who you would contact or to whom you would submit an updated Form 433B.

Contact a Columbus Tax Attorney for Assistance with Form 433B and Business Tax Liability

If your Columbus-area business has been asked to produce a Form 433B, it is evidence of a tax situation where you may want to consider the advice of a tax attorney or tax professional.  You can speak with a Columbus tax attorney by contacting The McGuire Law Firm for a free consultation.  A tax attorney is likely able to assist you in multiple ways beyond the preparation of the 433B and assist with resolving the matter and preventing the tax issue from occurring again.