how does the IRS assess your ability to pay outstanding taxes?
  • July 25, 2022
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Being unable to pay off outstanding taxes can be quite stressful as everyone is well aware of the dire consequences that may arise when the IRS decides to enforce collection measures. This does not mean that the IRS always goes hard on defaulters as there are avenues to get IRS debt relief. The IRS presents debt help facilities such as IRS penalty abatement, IRS tax installment agreement, and offers in compromise to taxpayers that are unable to fulfill their tax obligations for one reason or the other. The big question is, ‘how does the IRS assess your ability to pay outstanding taxes?’

Related Blog Post: 5 Types of IRS Installment Agreement to Pay Your Tax Debt

Collection Information Statement

The Collection Information Statement is a series of Form 433s that is used by the IRS to determine if a defaulting taxpayer is eligible for tax relief according to their ability to pay. The series comprises Forms A, B, and F, with Form F being the most common, depending on how you earn your income.

  • 433 A – Self Employed individuals
  • 433 B – Business-related tax debt
  • 433 F – Wage earners or Self-employed

Form 433 F

Form 433 F is the most common Collection Information Statement used by taxpayers to request assistance from the IRS with regards to paying tax debt. It is a two-page form that is quite easy to fill out with the help of a seasoned Dallas tax lawyer. The Form helps the IRS look into your income and assets with a view to determine the feasibility of you paying what you owe. In the event that a taxpayer is truly unable to pay what they owe in full, the IRS prefers collecting over time to pressing you for the full amount, penalties, and interest. There are a variety of debt relief options that result in the debt being either frozen or reduced.

Things to Remember

  • Every piece of information must have the backing of documentation
  • You must provide honest, accurate information

Related Blog Post: Notable Dos and Don’ts When Applying for IRS Penalty Abatement

What Goes into the Forms?

  • For a wage earner or self-employed person filling out the IRS Form 433 F, the IRS will want to know about your assets and lines of credit including things such as Food, Clothing, Personal care, Transportation, Health insurance, Medical expenses, Utilities, Rent/mortgage, Childcare costs, and Court-ordered payments.
  • For a business filling out Form 433 B or individual filling out Form 433 A, some of the information the IRS will want to know includes Net business income, Rental income, Wages, Gross receipts, Inventory costs, Repair costs, and Dividends.

Last Word

It is important to take immediate action regarding any unfiled or unpaid taxes. The best way to proceed is to secure the help of an IRS debt relief lawyer. When looking for a seasoned Dallas tax lawyer, talk to The Law Offices of Nick Nemeth. We have a wealth of experience serving the Dallas community by helping resolve all sorts of tax problems. To get a FREE no-obligation consultation, call (972) 426-2553 or fill out our contact form.

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What Our Clients Have to Say

Susan WilsonSusan Wilson
03:27 25 Jan 23
I have been very pleased with the solid counsel and guidance that Nick Nemeth has provided me regarding my tax issue. I found him to be honest and straightforward which I appreciated. I was impressed with his relevant experience and knowledge . He has definitely brought me peace of mind during a difficult and stressful time.
Sarah HowardSarah Howard
03:44 14 Nov 22
I would like to thank Mr. Nick and his staff for the superb help that I received from them. My IRS problem was resolved quickly and efficiently. It took 2 visits to convince me that I was over my head. I thought that I could call the IRS, appeal my tax notices and settle on a payment plan on my own. After many phone calls to the IRS, waiting sometimes more than 4 hours with no resolution to speak of, it proved to be extremely difficult and stressful. Revisiting Mr. Nick was a huge wake up call. My account was reviewed, and a payment plan was established with the IRS within a week. I will be forever grateful to the staff who worked on my case and especially to Lorna who listened to me vent while going through this painful process.
00:33 07 Aug 22
I cannot say enough good things about Nick and his team. When I first met with Nick he was up front, honest, friendly and efficient. When I worked with one of his attorneys, Eric B, I was just as pleased. All of the staff there are nice and very helpful. I wish I hadn't waited so long to get help with my issue. Over 6yrs I tried getting through and getting anywhere with the IRS and hardly made any progress. I know this may not be the case for all, and even I thought it would take longer than it did, but 3mos and they had my situation straightened out. I still can't believe it. Thank you thank you THANK YOU for all that you did for me. This is a huge burden gone out of my life now thanks to you. If anyone needs help out there, I know you may not want to shell out more money to get their help but it may just save you in the long run.
Spoilly GirlSpoilly Girl
23:49 03 Aug 22
The Nemeth Law team is exceptional. They treat their clients like a family member who is in crisis. They want you to get the best possible outcome. I really appreciate everything that they did for me. Jake and Ashley had the greatest role in my case and it all turned out for the best for me. Thank you Nick and team for easing my fears and getting me through the long process. I'm truly grateful.
Eddie WaltEddie Walt
19:44 12 Jul 22
During a time in which competent, professional service at a fair price seems to have disappeared, Mr. Nemeth and his team are a refreshing breath of fresh air.From my first phone call to the final settlement of our case with a non-responsive IRS, they under-promised, over-delivered and were in constant courteous contact to make sure we knew exactly what was happening and where we stood.I hope to never need their services again, but, should I receive another friendly letter from the IRS...I know who to call!
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