Form 433-A and 433-B Collection Information Statement: how the IRS financial disclosure framework actually works

The IRS Collection Information Statement framework operates through three principal forms that provide substantial financial disclosure across IRS collection alternatives. Form 433-A (Collection Information Statement for Wage Earners and Self-Employed Individuals) provides the standard individual financial disclosure framework. Form 433-A (OIC) (Collection Information Statement for Wage Earners and Self-Employed Individuals — Offer in Compromise) provides the substantial Offer in Compromise-specific financial disclosure framework with substantial additional substantive analysis. Form 433-B (Collection Information Statement for Businesses) provides the business financial disclosure framework. Form 433-F (Collection Information Statement) provides a substantial simplified version used in substantial automated collection situations.

The substantive scope of the Collection Information Statement framework spans substantial IRS collection alternatives. The forms are used in:

Offer in Compromise determinations under IRC §7122
Currently Not Collectible status determinations under IRM 5.16.1
Partial Payment Installment Agreement (PPIA) determinations under IRM 5.14.1
Streamlined Installment Agreement modifications
Substantial financial hardship determinations
Collection Due Process hearing financial analyses
Substantial collection alternatives under IRM 5.15 (Financial Analysis)

The substantial substantive framework operates through the Allowable Living Expenses (ALE) standards — IRS-published national and local standards for housing, transportation, food, clothing, health care, and other necessary expenses. Per IRM 5.15.1.10, the IRS uses these standards to determine what portion of a taxpayer's income is available for tax payment after substantial necessary living expenses. The substantial standards approach substantially limits IRS discretion in determining "reasonable collection potential" — the substantial calculation framework that drives Offer in Compromise acceptance and PPIA approval decisions.

This is how the Form 433 Collection Information Statement framework actually works across substantial collection alternatives, the substantive financial disclosure requirements for each form variant, the substantial Allowable Living Expenses standards framework, the substantial substantive analysis through reasonable collection potential calculations, and the strategic considerations for taxpayers using the Form 433 framework to navigate IRS collection.

What each Form 433 variant does

The framework has distinct variants for different situations:

Form 433-A (standard)

Primary use. Substantial:

Standard individual financial disclosure
Used by IRS Collection Division
Substantial substantive framework
Substantial procedural framework

Substantial sections:

Section 1 — Personal information. Substantial:

Taxpayer identification
Substantial personal data

Section 2 — Employment information. Substantial:

Employer information
Substantial wage data

Section 3 — Other financial information. Substantial:

Other income sources
Substantial financial data

Section 4 — Personal asset information. Substantial:

Bank accounts
Investment accounts
Real property
Vehicles
Other assets
Substantial documentation requirement

Section 5 — Self-employed information. Substantial:

Business assets
Business income
Substantial business documentation
Substantial procedural framework

Section 6 — Monthly income and expenses. Substantial:

Substantial financial analysis
Substantial documentation
Substantial individual case framework

Form 433-A (OIC)

Primary use. Substantial:

Offer in Compromise applications
Substantial substantive framework
Substantial OIC-specific analysis
Substantial procedural framework

Substantial substantive differences from Form 433-A:

More detailed asset valuation framework
Substantial substantive analysis
Substantial reasonable collection potential framework
Substantial individual case factors

Substantial substantive framework:

Section 1-6 similar to standard 433-A
Section 7 — Calculation of minimum offer amount
Substantial substantive computation
Substantial individual case framework

Form 433-B (businesses)

Primary use. Substantial:

Business entity financial disclosure
Corporate, partnership, LLC framework
Substantial business-specific data

Substantial substantive framework:

Section 1 — Business information. Substantial:

Business identification
Substantial business data

Section 2 — Business personnel and contacts. Substantial:

Officers, partners, members
Substantial procedural framework

Section 3 — Other financial information. Substantial:

Business income
Other revenue
Substantial financial data

Section 4 — Business asset and liability information. Substantial:

Cash accounts
Business equipment
Inventory
Real property
Substantial business assets

Section 5 — Monthly income/expenses. Substantial:

Business operations
Substantial financial analysis
Substantial business framework

Form 433-F (simplified)

Primary use. Substantial:

Automated Collection System (ACS)
Substantial simplified procedure
Substantial limited-detail framework
Substantial procedural framework

Substantial procedural framework:

Shorter than 433-A
Less detailed
Substantial automated processing
Substantial individual situations

Substantive financial disclosure requirements

For each form variant:

Income documentation

Substantial substantive requirements:

Wages and salary. Substantial:

Pay stubs (last 3 months)
W-2 forms
Substantial wage verification

Self-employment income. Substantial:

Profit and loss statements
Substantial business documentation
Tax returns (last 3 years)
Substantial substantiation

Investment income. Substantial:

1099-DIV (dividends)
1099-INT (interest)
1099-B (capital gains)
Substantial investment documentation

Retirement income. Substantial:

1099-R distributions
Social Security statements
Pension statements
Substantial documentation

Other income sources. Substantial:

Rental income
Royalties
Substantial alimony
Child support
Substantial substantiation

Asset documentation

Substantial documentation requirements:

Bank accounts. Substantial:

Bank statements (last 3 months)
Current balance verification
Substantial documentation

Investment accounts. Substantial:

Brokerage statements
Current market value
Substantial documentation

Real property. Substantial:

Property deeds
Property tax assessments
Mortgage statements
Substantial valuation documentation

Vehicles. Substantial:

Vehicle titles
Current Kelley Blue Book values
Loan balance documentation
Substantial valuation

Retirement accounts. Substantial:

401(k) statements
IRA statements
Pension valuation
Substantial documentation
See §72(t) early withdrawal framework

Business interests. Substantial:

Business valuation
Partnership interests
LLC interests
Substantial substantive valuation

Other personal property. Substantial:

Significant items
Substantial valuation
Substantial procedural framework

Liability documentation

Substantial documentation requirements:

Mortgage debt. Substantial:

Loan statements
Current balance
Substantial monthly payments

Vehicle loans. Substantial:

Loan statements
Current balance
Substantial monthly payments

Credit card debt. Substantial:

Account statements
Current balances
Substantial monthly minimums

Other debt. Substantial:

Various other liabilities
Substantial procedural framework
Substantial documentation

Monthly expenses documentation

Substantial Allowable Living Expenses (ALE) framework:

National standards (IRS-published):

Food
Clothing and services
Personal care products
Substantial standards by household size

Local standards (IRS-published by county):

Housing and utilities
Transportation (ownership and operating)
Substantial standards

Necessary expenses (case-specific):

Health care (insurance, out-of-pocket)
Court-ordered child support and alimony
Taxes (federal, state, local)
Substantial individual factors

Conditional expenses:

Substantial individual circumstances
Substantial case-by-case evaluation
Substantial procedural framework

The Allowable Living Expenses framework

Per IRS Collection Financial Standards:

National standards

Substantial standardized expense amounts:

Food, clothing, personal care:

By household size (1, 2, 3, 4, more)
National figures updated annually
Substantial standardized framework

Substantial 2026 amounts (illustrative — updated annually):

1 person: ~$735/month
2 persons: ~$1,275/month
3 persons: ~$1,495/month
4 persons: ~$1,810/month
Substantial standardization

Local standards

Substantial geographic variation:

Housing and utilities:

By county (and household size)
Substantial local variation
Substantial procedural framework

Transportation:

Ownership costs by region
Operating costs by metro area
Substantial procedural framework
1 or 2 cars per household typically allowed

Necessary expenses

Substantial substantive analysis:

Health care. Substantial:

Health insurance premiums
Out-of-pocket expenses
Substantial individual factors

Court-ordered obligations. Substantial:

Child support
Alimony
Substantial documentation

Required taxes. Substantial:

Federal income tax (current year)
State income tax (current year)
Local income tax
Substantial procedural framework

Substantial life insurance (term only). Substantial:

Substantial individual factors
Substantial documentation

Substantial retirement contributions (limited):

Substantial individual factors
Substantial procedural framework

Conditional expenses

Substantial substantive analysis:

Substantial substantive framework:

Case-by-case evaluation
Substantial individual circumstances
Substantial professional involvement valuable

Examples:

Substantial educational expenses
Substantial care for dependents
Substantial extraordinary medical expenses
Substantial individual analysis

Substantive analysis: Reasonable Collection Potential

The substantial substantive computation:

Future income component

Per IRM 5.8.5:

Substantial calculation framework:

Monthly disposable income × Multiplier = Future Income Component

Substantial monthly disposable income:

Monthly income
Minus Allowable Living Expenses
= Monthly disposable income
Substantial substantive framework

Substantial multipliers:

Lump Sum Cash Offer (within 5 months):

Monthly disposable income × 12

Periodic Payment Offer (within 24 months):

Monthly disposable income × 24

Asset component

Substantial calculation framework:

Net realizable equity (NRE):

Real property:

Fair market value × 0.80 (Quick Sale Value)
Minus encumbrances
= Net realizable equity

Vehicles:

Trade-in value × 0.80
Minus encumbrances
$3,450 exemption per vehicle (substantial)
= Net realizable equity

Bank accounts:

Balance minus 1 month necessary expenses
= Net realizable equity

Retirement accounts:

Current value × 0.80
Less hypothetical tax/penalty
= Net realizable equity
Substantial substantive consideration

Substantial business assets:

Fair market value × 0.80
Minus encumbrances
Substantial individual analysis
= Net realizable equity

Substantial Reasonable Collection Potential:

Future Income Component + Asset Component
= RCP
Substantial substantive framework
Substantial individual analysis

Substantive collection alternatives framework

How Form 433 supports collection alternatives:

Offer in Compromise

Per IRC §7122 and IRM 5.8:

Substantial substantive framework:

Form 433-A (OIC) required
Substantial RCP calculation
Offer must equal or exceed RCP
Substantial individual analysis
See OIC framework detail

Currently Not Collectible

Per IRM 5.16.1:

Substantial substantive framework:

Form 433-A required (sometimes Form 433-F)
Substantial substantive analysis
Income insufficient to pay
Substantial documentation
See CNC framework detail

Partial Payment Installment Agreement

Per IRM 5.14.1.6:

Substantial substantive framework:

Form 433-A required
Substantial RCP analysis
Monthly payment below full payment
Substantial documentation
See PPIA framework detail

Streamlined Installment Agreement

Per IRM 5.14.5:

Substantial substantive framework:

May not require Form 433 (under threshold)
Substantial procedural simplification
Substantial threshold framework
See installment agreement framework

Collection Due Process

Per IRC §§6320, 6330:

Substantial substantive framework:

Form 433-A may be required for collection alternative consideration
Substantial procedural framework
See CDP hearing framework

Procedural framework

For taxpayers completing Form 433:

Documentation gathering

Substantial documentation requirements:

3 months of:

Pay stubs
Bank statements
Credit card statements
Substantial financial documentation

Current statements for:

Investment accounts
Retirement accounts
Loan accounts
Substantial documentation

Tax returns:

Last 3 years (typical)
Substantial substantiation
Substantial procedural framework

Property documentation:

Real estate
Vehicles
Other property
Substantial valuation framework

Form completion

Substantial procedural framework:

Accurate disclosure. Substantial:

Substantial substantive requirement
Substantial professional involvement valuable
Substantial individual analysis

Substantial Allowable Living Expenses application:

IRS standards
Substantial substantive analysis
Substantial individual circumstances
Substantial procedural framework

Substantial substantive analysis:

Income calculation
Asset valuation
Liability documentation
Substantial individual factors

Submission

Submission to substantial IRS programs:

To Revenue Officer. Substantial:

Individual collection case
Substantial procedural framework
Substantial professional involvement valuable

To Automated Collection System (ACS). Substantial:

Substantial automated processing
Substantial procedural framework

To OIC Unit. Substantial:

Form 433-A (OIC) submission
Substantial procedural framework
Substantial substantive review

To Appeals Office. Substantial:

CDP hearing
Substantial procedural framework
Substantial substantive review

Strategic considerations

For taxpayers using Form 433 framework:

Engage qualified tax professional. Substantial:

Tax attorneys, CPAs, Enrolled Agents
Substantial procedural framework
Substantial professional benefit
Substantial relief opportunities

Document substantially. Substantial:

All required documentation
Substantial substantiation
Substantial procedural framework
Substantial individual analysis

Use Allowable Living Expenses standards strategically. Substantial:

National standards (food, clothing, personal care)
Local standards (housing, transportation)
Necessary expenses (health care, taxes, court-ordered)
Substantial substantive framework

Address asset valuation carefully. Substantial:

Fair market value
Quick Sale Value (80%)
Encumbrances
Substantial professional valuation

Plan for Quick Sale Value framework:

Assets valued at 80% of FMV
Substantial procedural framework
Substantial individual analysis

Address retirement account considerations. Substantial:

80% of current value
Hypothetical tax/penalty deduction
Substantial coordination with §72(t) early withdrawal
Substantial professional involvement valuable

Plan for substantial individual circumstances:

Health care expenses
Court-ordered obligations
Substantial extraordinary circumstances
Substantial documentation

Document substantial conditional expenses:

Educational expenses
Care for dependents
Extraordinary medical
Substantial individual factors
Substantial documentation

Coordinate with Offer in Compromise framework: Substantial:

Substantial substantive coordination
Substantial procedural framework
Substantial individual analysis

Address Currently Not Collectible considerations:

Substantial financial hardship documentation
Substantial procedural framework
Substantial coordination required

Plan for Partial Payment Installment Agreement:

Substantial RCP analysis
Substantial procedural framework
Substantial coordination required

Coordinate with installment agreement options: Substantial:

Streamlined vs financial analysis required
Substantial procedural framework
Substantial professional involvement valuable

Address federal tax lien framework: Substantial:

Substantial coordination required
Substantial procedural framework
Substantial collection coordination

Plan for Collection Due Process: Substantial:

Substantial coordination required
Substantial procedural framework
Substantial substantive review

Watch substantial monthly income calculation:

Wages (gross)
Self-employment income (net)
Other income
Substantial substantive analysis

Address substantial business asset valuation:

Going concern value
Liquidation value
Substantial individual analysis
Substantial professional valuation

Plan substantial vehicle exemption:

$3,450 per vehicle (substantial)
Substantial procedural framework
Substantial individual analysis

Coordinate with reasonable cause penalty defense: Substantial:

Substantial coordination required
Substantial substantive framework
Substantial individual analysis

Address §6751(b) supervisor approval coordination:

Substantial procedural framework
Substantial coordination required

Plan for Statutory Notice of Deficiency if assessment dispute:

Substantial procedural framework
Substantial coordination required
Substantial 90-day deadline

Watch substantial collection statute considerations:

CSED framework
Substantial procedural framework
Substantial planning consideration

Address substantial form variant selection:

Form 433-A (standard)
Form 433-A (OIC) (for OIC applications)
Form 433-B (businesses)
Form 433-F (simplified)
Substantial procedural framework

Document substantial financial hardship:

Substantial substantive analysis
Substantial documentation
Substantial procedural framework
Substantial individual factors

Plan for substantial IRS verification:

IRS will verify substantial data
Substantial documentation requirements
Substantial procedural framework
Substantial professional involvement valuable

Address substantial accuracy requirements:

False statements substantial:
Substantial criminal penalties potential
Substantial procedural framework
Substantial substantial care required

Coordinate with substitute for return situations: Substantial:

Substantial coordination required
Substantial procedural framework

Address trust fund recovery penalty coordination:

Substantial procedural framework
Substantial coordination required
Substantial individual analysis

Plan substantial multi-year strategy:

Substantial individual circumstances
Substantial planning consideration
Substantial procedural framework

Document substantial state tax coordination:

Substantial state-specific framework
Substantial procedural framework
Substantial individual analysis

Watch substantial dissipated assets framework:

IRS may impute assets recently dissipated
Substantial substantive analysis
Substantial procedural framework
Substantial professional involvement valuable

Address substantial transferee liability:

Substantial substantive framework
Substantial procedural framework
Substantial individual analysis

Plan substantial revision after initial submission:

Substantial procedural framework
Substantial individual circumstances
Substantial professional involvement valuable

For taxpayers using the Form 433 Collection Information Statement framework, the substantial financial disclosure requirements provide the substantial substantive foundation for substantial IRS collection alternatives including Offer in Compromise, Currently Not Collectible status, Partial Payment Installment Agreement, and substantial financial hardship determinations through Collection Due Process and other procedural frameworks. The substantial Allowable Living Expenses standards framework — national standards for food/clothing/personal care, local standards for housing/transportation, necessary expenses for health care/taxes/court-ordered obligations — provides substantial substantive structure that substantially limits IRS discretion and provides substantial procedural protection for taxpayers. The substantial reasonable collection potential calculation framework (monthly disposable income times multiplier plus net realizable equity in assets at Quick Sale Value of 80% FMV) provides the substantial substantive computation that drives substantial collection alternative outcomes. The work for taxpayers is in selecting the appropriate form variant for the substantial collection alternative being pursued (Form 433-A standard, Form 433-A (OIC) for Offer in Compromise, Form 433-B for businesses, or Form 433-F for substantial simplified situations), gathering the substantial documentation requirements (3 months of pay stubs and bank statements, current statements for investments and loans, last 3 years of tax returns, substantial property documentation), accurately completing the substantial financial disclosure with substantial professional involvement, applying the substantial Allowable Living Expenses standards framework strategically through the substantial individual circumstances analysis, addressing substantial asset valuation through the substantial Quick Sale Value framework with substantial professional valuation, and coordinating the Form 433 framework with the substantial broader collection alternatives framework including installment agreements, federal tax liens, and substantial subsequent procedural frameworks. For taxpayers facing substantial IRS collection situations, the framework provides meaningful pathways to substantial collection alternative resolution but requires substantial professional engagement to navigate effectively given the substantial documentation requirements, substantial substantive analysis through the Allowable Living Expenses framework, and substantial coordination with broader IRS collection procedural frameworks.