Form 433-A: Collection Information Statement for Wage Earners and Self-Employed Individuals
Provides the IRS with a complete picture of a taxpayer's financial situation when requesting an installment agreement, offer in compromise, or currently-not-collectible status.
Overview
IRS Form 433-A, Collection Information Statement for Wage Earners and Self-Employed Individuals, is a detailed financial disclosure document the IRS requires when a taxpayer seeks a collection alternative — such as an installment agreement, an offer in compromise (OIC), or currently-not-collectible (CNC) status. The form gives IRS Collection a comprehensive snapshot of the taxpayer's financial life: assets, liabilities, income, and necessary living expenses. It is the factual foundation on which the IRS evaluates whether a taxpayer can pay their tax debt in full, over time, or not at all.
The form is grounded in the IRS's authority under IRC § 6159 (installment agreements), § 7122 (offers in compromise), and related collection due process provisions. When an IRS Revenue Officer is assigned to a case, Form 433-A is typically mandatory. When a taxpayer is working through the Automated Collection System (ACS) or the IRS Online Payment Agreement tool, a full 433-A may not always be required — but it becomes essential the moment the case involves a Revenue Officer, an OIC submission, or a hardship claim.
For self-employed individuals, the IRS may also require Form 433-B (for businesses) alongside 433-A. However, sole proprietors whose business activity is directly tied to their personal finances are typically handled entirely on 433-A. The form is not a tax return and carries no filing deadline of its own, but submitting it inaccurately or incompletely can result in rejection of an installment agreement request, denial of an OIC, or — more seriously — a finding of fraud or false statement under IRC § 7206 if material facts are omitted. Most CPA firms and enrolled agents treat this form with the same rigor as a signed tax return.
Who Files This Form?
Form 433-A is required for individual taxpayers — including wage earners, self-employed individuals, and sole proprietors — who are pursuing any of the following collection alternatives with the IRS: a formal installment agreement where the IRS requests financial disclosure, an offer in compromise submitted on Form 656, or a request for currently-not-collectible hardship status.
Not every installment agreement triggers a 433-A. Taxpayers who owe $50,000 or less and can full-pay within 72 months may qualify for a Streamlined Installment Agreement, which does not require a 433-A. Similarly, taxpayers below certain balance thresholds using the IRS Online Payment Agreement portal may never be asked to complete the form. However, once a balance exceeds those thresholds, a Revenue Officer is assigned, or the taxpayer cannot meet standard repayment terms, a 433-A becomes mandatory.
For offer in compromise submissions, a completed 433-A (OIC) — a version of the form packaged with Form 656 — is always required for individual filers. Note that the OIC version has a slightly different format than the standard 433-A used in installment agreement or CNC contexts; practitioners should confirm they are using the correct version.
Self-employed individuals and sole proprietors must complete all sections of the form, including Schedule A (real property) and the detailed income and expense sections. Wage earners may have fewer sections to complete but must still disclose all assets, bank accounts, retirement accounts, and other financial interests.
Edge cases worth noting: taxpayers in community property states must disclose a non-liable spouse's income (at least for RCP calculation purposes in an OIC). Minors and dependents are not separately required to file 433-A. A taxpayer whose only income is Social Security may still need to file if they have significant assets.
Key Fields
Section 1: Personal Information
Captures the taxpayer's name, SSN, address, marital status, and household composition. The number of dependents and household members directly affects the IRS's allowable living expense calculation, so accuracy here has downstream financial significance.
Section 2: Employment Information
Documents the taxpayer's employer, pay frequency, and gross wages. For self-employed individuals, this section captures business name, type, and EIN. The IRS uses this section to verify income and to identify potential levy sources — payroll levies are one of the IRS's most powerful collection tools.
Section 3: Other Financial Information
Covers pending lawsuits, trusts, safe deposit boxes, foreign accounts, recent asset transfers, and business interests. This is one of the most scrutinized sections by Revenue Officers — any asset transferred within the past 10 years for less than fair market value can be questioned as a fraudulent conveyance.
Section 4: Personal Asset Information (Bank Accounts, Investments, Retirement)
Lists all bank and financial accounts, brokerage accounts, IRAs, 401(k)s, and cash on hand. The IRS calculates 'quick sale value' of these assets when determining reasonable collection potential (RCP) for an OIC. Omitting any account — even a dormant one — is a material error.
Section 5: Real Property
Details any real estate owned, including primary residence, rental properties, and land. The IRS will request current fair market value (often based on county assessor records or a recent appraisal) minus the outstanding mortgage balance to determine equity. This equity is factored into RCP.
Section 6: Vehicles
Lists all cars, trucks, motorcycles, boats, RVs, and other vehicles. The IRS uses a quick sale value (typically 80% of the Kelley Blue Book private party value) minus any loan balance to determine net equity. Leased vehicles are noted but generally carry no equity value.
Section 7: Business Assets (Self-Employed Only)
For sole proprietors, this section captures business bank accounts, receivables, equipment, and inventory. The IRS can levy business assets separately from personal assets, so thorough disclosure here is essential. Many self-employed taxpayers underreport receivables — a common audit flag.
Section 8: Monthly Income
Requires itemization of all income sources: gross wages, net self-employment income, rental income, Social Security, alimony, and other receipts. The IRS wants gross figures for wages but net (after business expenses) for self-employment. Using net wages instead of gross for W-2 earners is a frequent mistake.
Section 9: Monthly Allowable Living Expenses
This is the most strategically important section of the form. The IRS compares the taxpayer's claimed expenses against National and Local Standards (housing, transportation, food, etc.) and allows actual expense only when it exceeds the standard and is necessary. A CPA's job here is to document actual expenses precisely and argue for above-standard amounts with supporting evidence.
Signature / Certification
The taxpayer signs under penalty of perjury, which means knowingly omitting assets or understating income is a federal crime under IRC § 7206. Both spouses must sign if the liability is joint. The preparer's signature is not required on the form itself, but the practitioner's name is often noted in the submission package.
Filing Deadlines
No penalty for the form itself; it supports collection alternatives.
Step-by-Step Instructions
- 1
Gather all financial documentation before opening the form: last 3 months of bank statements for every account, most recent pay stubs, last two years of filed tax returns, current mortgage statements, vehicle loan documents, retirement account statements, and any documentation of business income or expenses for self-employed clients.
- 2
Complete Section 1 (Personal Information) thoroughly, including all household members and dependents — this directly calibrates the IRS's allowable National Standards for food, clothing, and miscellaneous expenses.
- 3
Work through Sections 2 through 7 asset by asset, recording current fair market value and outstanding loan balances for each item. Use Kelley Blue Book (private party, not dealer) for vehicles and county assessor or a licensed appraisal for real property. Apply the IRS quick-sale-value discount (typically 80%) only for the OIC RCP calculation, not on the face of the form itself.
- 4
Complete Section 8 (Monthly Income) using gross wage figures for W-2 earners directly from current pay stubs. For self-employed clients, calculate average monthly net income from the most recent 12 months of business records, deducting ordinary and necessary business expenses but not personal expenses that bleed through the business.
- 5
Complete Section 9 (Monthly Expenses) with actual documented figures. Cross-reference every expense category against the current IRS National Standards and Local Standards, available on the IRS website. For amounts above the Standards, prepare a written explanation and attach supporting documentation (lease agreements, insurance bills, medical receipts, etc.).
- 6
Review Section 3 (Other Financial Information) carefully with the client — ask directly about pending litigation, interests in estates or trusts, foreign financial accounts, and any asset sales or transfers in the past 10 years. Undisclosed items here are the most common source of Revenue Officer disputes and potential fraud referrals.
- 7
Calculate the client's monthly disposable income (Section 8 total minus Section 9 total). This figure is the IRS's starting point for an installment agreement amount and, multiplied by the applicable OIC collection period (12 or 24 months depending on payment terms), determines the minimum OIC offer amount.
- 8
Have the taxpayer — and non-liable spouse if in a community property state — review every line before signing. Submit the completed form as part of the relevant package: attached to Form 9465 for an installment agreement request, or included in the Form 656 OIC package. Retain a signed copy in the client file.
- 9
If a Revenue Officer has been assigned, provide the 433-A directly to that officer, ideally with a cover memo summarizing the client's financial position and the requested collection alternative. Follow up within the timeframe specified by the RO to avoid a lapse that could trigger enforced collection action.
Common Mistakes to Avoid
Reporting net wages instead of gross wages in Section 8.
Section 8 requires gross income before taxes and deductions for wage earners. Report the gross figure; the IRS will separately apply National Standards for taxes withheld when computing disposable income.
Omitting retirement accounts, especially IRAs and 401(k)s with small balances.
All financial accounts must be disclosed regardless of balance. For OIC purposes, the IRS includes retirement account equity (reduced by early withdrawal penalty and taxes) in the RCP calculation, so omission can invalidate an offer.
Using dealer retail value (rather than private-party value) for vehicles, overstating asset equity.
The IRS applies quick-sale value — use Kelley Blue Book private party or NADA clean trade-in as a reasonable proxy. Overstating vehicle value inflates RCP and can kill an OIC that would otherwise be accepted.
Failing to disclose assets transferred to family members or trusts within the past 10 years.
Section 3 explicitly asks about asset transfers. Omitting a transfer — even one that was a legitimate gift — invites a Revenue Officer to treat it as a fraudulent conveyance, which can significantly increase the collectible amount the IRS demands.
Claiming above-standard living expenses without documentation.
The IRS will default to the National or Local Standard if actual expenses aren't supported. Attach bills, insurance statements, lease agreements, and medical records for any expense claimed above the applicable standard.
Submitting an outdated version of the form.
The IRS revises Form 433-A periodically. Always download the current version from IRS.gov immediately before preparing a submission; Revenue Officers will reject forms that are not on the current revision.
Frequently Asked Questions
Form 433-A is a financial disclosure statement the IRS uses to evaluate a taxpayer's ability to pay a tax debt. It is required for individuals requesting an installment agreement where the IRS asks for financial information, an offer in compromise, or currently-not-collectible status. The IRS uses the information to determine how much, if anything, a taxpayer can realistically pay toward their balance.
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