IRS Form 433-B, or Collection Information Statement for Business is used when a business owes federal taxes and cannot pay them in full. A person who owns his own business and owes taxes personally is required to fill out Form 433-B as well. Businesses including partnerships, corporations, and a limited liability company classified as a corporation can file the Form 433-B. This form provides information to the IRS in regards to the ability of the business to pay its federal tax liability.

When to file Form 433-B

Under three circumstances, you likely must fill out Form 433-B and submit it to the IRS.

1. Request for installment agreement

If the IRS allows your business to enter into an installment agreement, your business can pay tax debt in monthly payments, instead of paying their tax liability all at once. The maximum timeframe for any installment agreement is usually 10 years. Form 433-B helps the IRS determine whether a business qualifies to enter into an installment agreement. The amount of the installment payments varies according to the amount of the taxes owed, and the business’s income and expense.

2. Ask for temporary delay due to hardship

A business can request a temporary delay if it demonstrates that paying a tax debt when due can lead to severe financial hardship. The 10-year period for collecting the taxes will not start to run until the temporary delay is over. Form 433-B helps the IRS determine whether a business qualifies for a temporary delay.

3. Apply for Offer in Compromise

The OIC program is a collection alternative that settles a business’s debt for an amount less than what it owes, and suspends any levy actions. With an Offer in Compromise, a business can choose different types of payment arrangements. IRS Form 433-B helps the IRS determine whether a business qualifies for an Offer in Compromise. It would be wise for businesses to seek professional advice before applying this program.

How to fill out Form 433-B

The Form 433-B has five sections. The first and second sections ask for basic business information and business personnel and contacts. Section 3 asks for other financial information about the business. Section 4 request detailed business asset and liability information. Section 5, the last section, asks for the business’s monthly income and expenses statement.

After filing out Form 433-B, a business needs to provide the following documents for the three months prior to the date of filing Form 433-B with the IRS:

• All bank statements and investment account statements
• Lender statements regarding all assets, including monthly payments and balances, as well as copies of UCC financing statements and depreciation schedules
• Bills or monthly statements for recurring expenses such as rent, utilities, insurance premiums, telephones, property taxes, and court-ordered payments
• Credit card statements, profit and loss statements, and all loan payoffs, and
• Copies of the last income tax return filed and all attachments.

To find out if your business qualifies for filing Form 433-B, contact us at 877-829-2455 to schedule a initial consultation.