Before You Fill Out 433-A Learn Your Options

There are many IRS debt programs taxpayers can choose from to take care of their back taxes. The most well known is called the Offer in Compromise. This offer can be found on IRS Form 433-A. The IRS offers the form here. Commercials on television frequently shout about large settlements through this program. As a result, taxpayers think that 433-A approval is common. However, the reality is that the IRS only accepts 15-25 percent of 433-A applications annually. Therefore, experts say that this is one of the most difficult programs to qualify for.

Form management is essential for effective filing

The Truth about 433-A

The IRS form needed to apply for an Offer in Compromise is form 433-A. This application will ask for all the financial details of a taxpayer, including all income sources, monthly payments, and all business information. Once this is given, the IRS will look at the financial ability of a taxpayer to pay their tax debt within their Statute of Limitations. The IRS will then take the results and use their Offer in Compromise formula to see if the taxpayer qualifies for an Offer in Compromise under three standard requirements:

• Doubt as to Collectibility: The IRS determines that the taxpayer is unlikely to pay a per-determined portion of their debt by the expiration of their Statute of Limitations.
• Doubt as to Liability: The taxpayer can prove the IRS examiner made a mistake interpreting a tax law and assessed the tax debt amount incorrectly.
• Effective Tax Administration: The taxpayer can prove that satisfying the tax debt will cause financial hardship.

Taxpayers should know which requirements are needed to qualify for an Offer in Compromise, using form 433-A. Applying for an Offer in Compromise and being denied, depending on the severity, could cause added penalties. In addition, you give the IRS the information it needs to decide what the taxpayer can afford based on their own calculations. Call us to find out what your options are, or if you qualify for an Offer in Compromise, today!

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