What exactly is Form 433-b used for in financial and tax matters? 

It shows your business’s transparency and compliance with tax laws.

This guide will help you fill out Form 433 B correctly. It ensures you meet your responsibilities and protect your business’s credibility. By doing this, you can make sure your company is not on the IRS’s list of those who do not meet tax obligations.

The Internal Revenue Service (IRS) in the US uses Form 433-B as part of their Collection Information Statement series. It is made for businesses that owe taxes to the IRS but cannot pay the full amount.

Businesses usually use Form 433 B to negotiate payment plans with the IRS. This includes installment agreements and offers in compromise. By filling out the IRS 433B Form, businesses can show their financial status. This form helps them suggest a realistic plan to repay their tax debts.

Eligible Business Entities for Form 433-B

To fill out Form 433 B, you must be one of the business types listed below. This will help you set up a payment plan with the IRS.

• Partnerships
• Corporations
• Exempt Organizations
• S Corporations
• Limited Liability Companies (LLC) are classified as corporations
• Other LLCs

If you’re running your own business by yourself, fill out Form 433-A for payment plans. For offers to settle for less than you owe, use Form 433-B (OIC), not Form 433-B.

Why the IRS request Form 433-B?

The IRS uses Form 433-B to examine a company’s financial health. This helps them decide the best way to settle tax debts. It’s a crucial step for businesses to address their tax responsibilities fairly.

• To gather detailed financial information about businesses owing taxes.
• To help assess the business’s ability to pay tax debt.
• Aids in determining appropriate collection actions, such as payment plans or offers in compromise.
• Provides insight into the business’s assets, liabilities, income, and expenses.
• Facilitates the development of feasible resolution plans for both businesses and the government.

Requirements for Form 433-B

Before starting to fill out Form 433-B, gather all vital financial documents related to your business. This includes but is not limited to:

• Business income information such as profit and loss statements, revenue reports, and balance sheets.
• Documentation of business expenses, including payroll records, rent or mortgage payments, utilities, and other operational costs.
• Documentation of assets owned by the business, such as real estate, vehicles, equipment, and inventory.
• Records of business debts and liabilities, including outstanding loans, lines of credit, and accounts payable.

Before completing Form 433 B, ensure you have a clear understanding of your business’s financial standing. This includes:

• Total income generated by the business over a specified period.
• Total expenses incurred by the business, including both fixed and variable costs.
• Net profit or loss for the business.
• Assets owned by the business and their current market values.
• Liabilities and debts owed by the business, including outstanding balances and payment schedules.

How do I fill out IRS Form 433-B?

To complete IRS Form 433B, businesses must clearly show their financial status. This includes listing assets, debts, income, and expenses. This detailed accounting provides the IRS with the information necessary to make informed decisions regarding tax repayment options.

Let’s get each section in detail.

Section 1: Business Information

This section gathers basic details about your business. It includes the business name, contact information, and the type of business structure, such as a partnership or corporation. You’ll need to provide:

1. Your business name.
2. The street and mailing address.
3. The county where your business is located.
4. Your business telephone number.
5. The type of business you have matters. It could be a sole proprietorship, partnership, or corporation. It might also be an LLC.
6. Your business’s website address.
7. Whether your business sells products or services online and if you use a payment processor like PayPal or Stripe.
8. Details about the credit cards your business accepts, such as Visa or Mastercard. This includes merchant account numbers and the banks that issued them.
9. The number of employees you have, the total monthly payroll, and how often you make tax deposits.
10. If you have signed up for the Electronic Federal Tax Payment System (EFTPS), you can send your tax payments online.

Remember to list the Employer Identification Number (EIN) and the date your business was established. If your business has partners or major shareholders, their details should be included too.

Section 2: Business Personnel and Contacts

This part of the IRS 433B Form is where you list key people involved in your business. For partners, officers, LLC members, and major shareholders, you’ll need to provide:

1. Their full names and titles.
2. Complete home addresses, including city, state, and ZIP code.
3. If they’re responsible for depositing payroll taxes for the business (Yes or No).
4. Each person’s taxpayer identification number could be a Social Security Number or an Employer Identification Number.
5. Contact information, such as home, work, or cell phone numbers,.
6. The percentage of the business they own and any shares or interests they hold.
7. The amount of salary or income they draw from the business annually.

This information helps the IRS understand who is responsible for business decisions and financial matters.

Section 3: Other Financial Information

This section asks for a range of additional financial details about your business, such as:

1. Payroll Services: Please state if your business uses a payroll service or reporting agent. Include the name and address. Also, note the dates when these services started and/or ended.
2. Legal Proceedings: Share any current lawsuits you are involved in. State if your business is the plaintiff or defendant. Include where the case is filed, the case number, and the type of lawsuit. Also, mention the expected end date and the amount involved.
3. Bankruptcy History: Please state if the business has ever declared bankruptcy. Include details about the filing, dismissal, and discharge dates. Also, provide the case and district information.
4. Outstanding Debts from Related Parties: Report any debts owed to the business by related parties, like officers or partners. Include their names, addresses, loan dates, current balances, and payment schedules.
5. Asset Transfers: Declare if the business has transferred any assets for less than their value in the past decade. List these assets, their transfer values, dates, and to whom they were transferred.
6. Affiliates and Subsidiaries: Confirm whether the business has affiliations with other businesses, such as subsidiaries or parent companies, and provide their details.
7. Expected Income Changes: Please state if you expect an increase or decrease in income. Include an explanation and when this change will happen.
8. Government Contracts: Please state if the business is a federal government contractor. If it is, include the relevant contract details in the accounts receivable section.

This section gives a clear view of other financial factors. These factors can impact the business’s financial health and its ability to pay any unpaid taxes.

Section 4: Business Asset and Liability Information

This section requests detailed information on your business’s assets and liabilities. You’ll be asked to report:

1. Cash on Hand: You will list any cash that is not in the bank. This includes money kept at the business or in other places. You should also provide a total amount.
2. Business Bank Accounts: For all business bank accounts, such as checking, savings, money market accounts, or other accounts like
   • PayPal or other payment processors, you’ll need to list:
   • The type of account and the financial institution’s name and address.
   • The account number.
   • The current balance as of a specific date.
3. Cash in Banks: Add up the totals from all accounts to get the total cash in banks.
4. If your business is owed money by clients or customers, or has e-payments or contracts, you should make a list. This includes government grants
   • The name and address associated with each receivable.
   • The status, such as age or other relevant descriptors of the receivable.
   • The due date for payment.
   • Invoice numbers, if applicable.
   • The total amount due.
5. Outstanding Balance: Here you’ll sum the total amounts due from all accounts receivable listed.
6. Investments: List any investment assets your business has. This can include stocks, bonds, and mutual funds. You can also include stock options and commodities like gold, silver, and copper. Digital assets such as Bitcoin, Ripple, and Litecoin are also part of this list. For each investment, you need to provide:
   • Whether it’s used as collateral.
   • The current market value.
   • Any loan balances against it.
   • The equity value minus the loan.
7. Available Credit: Detail all lines of credit and credit cards your business has, including:
   • The full name and address of the financial institution.
   • The credit limit for each line of credit.
   • The current amount owed.
   • The amount of credit available as of a specified date.
8. Total Credit Available: Calculate the sum of the credit available across all accounts.
9. Real Property: Include all real estate and property like land contracts, leases, or rentals that the business owns. For each property, provide:
   • A description.
   • The purchase or lease date.
   • The current fair market value.
   • Any current loan balances against it.
   • The monthly payment amount.
   • The date of the final payment.
   • The equity value after deducting loans.
10. Leased and Purchased Vehicles: Include any vehicles your business leases or owns. This includes cars, RVs, motorcycles, and off-road vehicles
    • The make and model of each vehicle.
    • The year they were made.
    • The mileage.
    • The vehicle identification number (VIN).
    • The name and address of the lender or lessor.
    • The current fair market value.
    • The loan balance on each vehicle.
    • The monthly payment amount.
    • The final payment date.
    • Calculate the equity in each vehicle, which is the fair market value minus any loan balance.
11. Total Equity for Vehicles: Add the equity amounts from all the listed vehicles to find the total vehicle equity.
12. Business Equipment and Intangible Assets: List all equipment, machinery, merchandise inventory, and other assets, including intangible assets such as licenses, patents, or copyrights. For each listed asset, provide:
    • A description of the asset.
    • The location of each asset.
    • The name and address of any lender or lessor.
    • The purchase or lease date.
    • The current fair market value.
    • The current loan balance.
    • The monthly payment amount.
    • The final payment date.
    • The equity value for each asset is its fair market value minus any loan balance.
13. Additional Assets: Describe any other assets not previously listed. This can include:
    • Intangible assets with a description and the lender or lessor’s contact information if applicable.
14. Total Equity: Calculate and enter the sum of the equity for these additional assets.
15. Business Liabilities: Report any outstanding business debts, such as loans or judgments. You will need to specify:
    • The description of each liability.
    • Whether the liability is secured or unsecured.
    • The date any security interest was pledged (if applicable).
    • The balance is currently owed.
    • The date of the final payment.
    • The monthly payment amount.
16. Total Payments: Add up all the payment amounts for the listed liabilities. This will give you the total monthly payment the business must make.

Section 5: Monthly Income/Expenses Statement for Business

This section is designed to capture a snapshot of your business’s monthly financial activity. Here you’ll detail your typical business income and expenses, offering insight into the business’s profitability. What you’ll need to provide includes:

1. The total monthly business income is divided into categories. These include gross receipts from sales or services, rental income, interest, dividends, and other income types.
2. The total monthly business expenses include materials purchased, inventory bought, wages and salaries, rent, utilities, vehicle costs, insurance, taxes, and other relevant expenses.
3. For both income and expenses, you’ll enter the gross monthly amount or actual monthly figure, as applicable.
4. You’ll also affirm that the information provided is true to the best of your knowledge, under penalty of perjury.

This detailed financial information helps the IRS assess your ability to pay taxes and may influence payment plan options.

Get Help With Business Back Taxes

Handling a large tax bill can be tough, but acting early can help reduce interest and penalties. Using IRS Form 433 B is a key step in this process. This Form 433 B lets you share details about your business’s finances. This information is important for setting up payment plans or negotiating tax debts with the IRS.

After you handle your back taxes, it’s smart to save about 30% of your monthly business income. This will help you meet future tax obligations. By doing this and keeping the funds in a separate account, you prepare for upcoming tax payments. This helps keep your business finances stable.

Consider seeking professional help when filling out IRS Form 433 B to ensure accuracy and compliance. Besides filling out this form, the Keith Jones tax relief option provides many helpful services. The Keith Jones tax relief option offers many helpful services. In addition to filling out this form, it provides IRS audit representation. It also acts as an IRS wage garnishment attorney. The option includes tax relief and assistance with offers in compromise.