Sam Brotman, JD, LLM, MBA December 16, 2013 3 min read

IRS Form 433-A Breakdown

IRS Form 433-A, Collection Information Statement for Wage Earners and Self-Employed Individuals is used to collect financial information about the taxpayer and the taxpayer’s ability to repay a current tax liability.

Major Sections of the IRS Form 433-A:

  • Section 1: Personal Information
  • Section 2: Employment Information for Wage Earners
  • Section 3: Other Financial Information
  • Section 4: Personal Asset Information for All Individuals
  • Section 5: Monthly Income and Expenses
  • Section 6: Business Information
  • Section 7: Sole Proprietorship Information

Section one of the IRS Form 433-A requests general information specific to the taxpayer. Request for information includes full name, marital status, address, and phone numbers. Section two also requests general information with regard to the taxpayer’s employment status. In this section, the taxpayer will be asked about how many withholding allowances claimed on Form W-4, pay period, and occupation.

Questions located in section three of the IRS Form 433-A center on other types of non-wage earning information. For example, a taxpayer will be expected to disclose information about current lawsuits; bankruptcy filings; foreign residency status; beneficiary of trust, estate, or life insurance policy; safe deposit boxes; and recent asset transfers. In section four, taxpayers must disclose information with regard to current cash on hand in terms of personal bank accounts; investments; available credit on bank issued credit cards; real property; personal vehicles leased and/or purchased; personal assets; and total equity.

In section five of the IRS Form 433-A , the taxpayer must disclose wages, salaries, pensions, and social security; net income from business; net rental income; other income (i.e., unemployment compensation, gambling income, oil credits, and subsidies); expenses not generally allowed specific to private school and public/private college expenses, charitable contributions, voluntary retirement contributions, or payments on unsecured debts; food, clothing, and miscellaneous expenses; housing and utilities; vehicle ownership costs; vehicle operating costs; public transportation; out of pocket health care costs; and current year taxes.

Sections six and seven of the IRS Form 433-A are to be completed by taxpayers who are self-employed. In section six, taxpayers must disclose their type of business, payment processing tools, credit cards accepted by the business, business bank accounts, accounts/notes receivables, and business assets. Section seven requests information about the current accounting method used, total monthly business income, and total monthly business expenses. Taxpayers must know their company’s net business income.

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Sam Brotman, JD, LLM, MBA

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