When a taxpayer doesn’t meet streamline criteria, the collection process gets more complicated. Let’s look at scenarios where the Streamlined Installment Agreement is not an option. In all such cases, resolution is based on the current financial circumstances.
What is an IRS Collection Information Statement, or a CIS?
To evaluate current financial conditions, we need a Collection Information Statement, or a CIS. Collection Information Statements cover information such as income, expenses, assets (such as real and personal property), business equipment, and accounts receivable. The key for taxpayers and representatives to understand is that unless you can pay what’s owed quickly or qualify for. It’s a road map to an appropriate resolution of a balance due, and the sooner we get it, the smoother the road will be.
How do you submit a Collection Information Statement?
How do you submit a Collection Information Statement? If it’s an individual wage earner or self-employed individual not assigned to a field revenue officer, you can use the Form 433-F. This is a relatively short form (two pages). It’s the shortest and simplest Collection Information Statement, and generally, it’s used when not a lot is owed and the finances aren’t especially complicated.
Collection Information Statements: IRS Form 433-A
Larger, higher-dollar priority cases are worked by Collection field function revenue officers who have two longer, more detailed Collection Information Statements: the Form 433-A, Collection Information Statement for Wage Earners and SelfEmployed Individuals, as well as the Form 433-B, Collection Information Statement for Businesses.
What is Form 433?
The Form 433-A is for taxpayers who owe income tax on the Form 1040, persons responsible for the Trust Fund Recovery Penalty, persons liable for partnership liabilities, individual owners of a limited liability company disregarded entity, or self-employed individuals (or those who have self-employment income). The Form 433-B is used for partnerships, corporations, exempt organizations, subchapter S corporations, and limited liability companies.
Form 433-A and Form 433-B
The information that goes into preparing the Collection Information Statement Form 433-A and B is detailed. It may need continuation sheets or documents to substantiate the reported information. I can’t give you an entire list, but I can give you an example of common attachments to the Collection Information Statement: wages and salary statement, bank statements and cancelled checks, records of outstanding loans, and business balance sheets and income statements.
How to Prepare an IRS Collection Information Statement
If you’re not sure what to attach, see Publication 1854, How to Prepare the Collection Information Statement 433-A and Publication 5059, How to Prepare a Collection Information Statement Form 433-B. Let’s review how a Collection Information Statement is used. Simply, it provides financial information that allows us to determine how an individual or a business can resolve their liability. Until we have all of the information and documents to verify what’s on the statement, we can’t make an appropriate decision.