IRS Form 433-A
If you are like many taxpayers that are burdened with an insufferable amount of back tax debt, you have undoubtedly heard claims of “settling your tax debt for pennies on the dollar”. Like the proverbial, used car sales man, these claims are far-fetched as best. The IRS Form 433-A, “Collection Information Statement for Wage Earners and Self-Employed Individuals”, is a financial disclosure that all applicants for an Offer in Compromise are required to provide as part of an OIC application.
This disclosure provides the IRS with an in-depth “fact” based snapshot of your financial position and ability to pay your back tax debt based on your income and wages, monthly expenses, business information, and assets, and ultimately forms the basis of whether your Offer in Compromise offer will be accepted or denied.
The information provides an outcome what the IRS calls the Reasonable Collection Potential, which is used to determine if there is sufficient income to support a monthly payment with an Installment Agreement and what assets are available to be levied.
Offer In Compromise Acceptance Rates
It’s said that approximately 20 percent of taxpayers that apply for an Offer In Compromise are ultimately approved on the basis of the information submitted on the Form 433-A. Here in lies the key point, the determination on whether your back tax debt can be settled for less than the amount owed depends on the accurate and complete presentation of “facts” on the Form 433-A. At Tax Samaritan, we are experts in preparing the Form 433-A to ensure that your facts are presented accurate and thoroughly based on what is allowed by the tax law. This is significant as it can make the difference between having your OIC accepted vs. denied. Suffice to say, the Form 433-A is the single most important document of facts that will be used to determine the outcome of resolving your tax debt on favorable terms.
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Tax Samaritan is a team of Enrolled Agents with over 25 years of experience focusing on US tax preparation and representation. We maintain this tax blog where all articles are written by Enrolled Agents. Our main objective is to educate US taxpayers on their tax responsibilities and the selection of a tax professional. Our articles are also designed to help taxpayers looking to self prepare, providing specific tips and pitfalls to avoid.
When looking for a tax professional, choose carefully. We recommend that you hire a credentialed tax professional such as Tax Samaritan that is an Enrolled Agent (America’s Tax Experts). If you are a US taxpayer overseas, we further recommend that you seek a professional who is experienced in expat tax preparation, like Tax Samaritan (most tax professionals have limited to no experience with the unique tax issues of expat taxpayers).
Randall Brody is an enrolled agent, licensed by the US Department of the Treasury to represent taxpayers before the IRS for audits, collections and appeals. To attain the enrolled agent designation, candidates must demonstrate expertise in taxation, fulfill continuing education credits and adhere to a stringent code of ethics.
Every effort has been taken to provide the most accurate and honest analysis of the tax information provided in this blog. Please use your discretion before making any decisions based on the information provided. This blog is not intended to be a substitute for seeking professional tax advice based on your individual needs.