IRS Form 433-A: Collection Information Statement for Wage Earners and Self-Employed

IRS Form 433-A is the financial disclosure form the IRS uses to evaluate your ability to pay before approving an Offer in Compromise or an installment agreement.

When you apply to settle your tax debt for less than you owe, the IRS does not take your word for it. Form 433-A forces a full accounting of your income, assets, and monthly expenses so the agency can calculate your Reasonable Collection Potential — the most it believes it can realistically collect from you. Your offer amount must meet or exceed that figure.

Who Needs to File Form 433-A

If you are submitting Form 656 for an Offer in Compromise based on doubt as to collectibility, Form 433-A is mandatory — no exceptions. You also need this form if you owe more than $50,000 and are requesting an installment agreement, or if the IRS collection division has contacted you and determined that a streamlined agreement does not apply.

Self-employed taxpayers and sole proprietors use Form 433-A. If you own a business with employees, the IRS may also require Form 433-B (for business entities).

How to Complete Form 433-A

The form has eight sections. Work through them in order and leave nothing blank — an incomplete form is the single most common reason the IRS rejects or delays an OIC.

Sections 1 and 2 — Identity and Employment. Start with your personal information. If you are married, both spouses must complete and sign the form even if only one person has the tax liability. Employment information goes in Section 2; include your employer’s name, address, and pay frequency.

Section 4 — Monthly Income. Report every dollar that comes in: wages (use gross, not net), self-employment net profit, Social Security, alimony, rental income, and distributions from retirement accounts. The IRS compares these figures against your bank statements, so they must match.

Section 5 — Assets. This is where many people underestimate what the IRS can see. You must report the quick-sale value (roughly 80% of fair market value) of all assets — bank accounts, investment accounts, retirement accounts (minus the early-withdrawal penalty), real estate equity, vehicles, and business assets. The IRS uses this to calculate the asset portion of your Reasonable Collection Potential.

Section 6 — Monthly Expenses. The IRS limits what it will allow as necessary living expenses using National and Local Standards tables. Transportation and housing allowances are capped by county and family size. Expenses above those limits generally cannot reduce your offer amount unless you can show a special circumstance.

Where to Get the Form and Where to Submit It

Download Form 433-A from IRS.gov. Do not use a version from a third-party site — the IRS updates this form periodically and will reject outdated versions. Submit the completed 433-A as part of your OIC package to the IRS OIC processing unit listed in the Form 656 Booklet instructions. Mail it; the IRS does not accept OIC packages electronically.

Common Mistakes to Avoid

• Leaving sections blank. Write “N/A” or “0” rather than leaving any line empty.
• Using net pay instead of gross wages. The IRS calculates allowable expenses separately — you report gross income, not take-home.
• Underreporting assets. The IRS cross-references your 1040s, W-2s, and third-party data. Omitting an asset is considered fraud.
• Using outdated expense amounts. Match your reported expenses to your actual bank statements for the same months.
• Forgetting to sign. An unsigned 433-A is not valid and will be returned.

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