It is traumatic enough receiving a letter from the Internal Revenue Service, but then comes the time to reply and provide the IRS with all of the data it requests in order to positively resolve, with finality, any suspected tax obligation. How do taxpayers prepare themselves for the collection of this information? What minimal information must be provided in a typical situation? What does the IRS specifically require as to any forms or documentation? With their experience helping taxpayers utilize a vast number of IRS forms, the tax professionals at the Thorgood Law Firm can guide any taxpayer through this often stressful process.
The IRS uses Forms 433A, 433B, and 433F as financial statements to be used by taxpayers disclosing information pursuant to an agency request. Forms 433A and 433B are used in situations when a taxpayer is dealing with an IRS Revenue Officer. On the other hand, Form 433F is used when negotiating with the IRS Automated Collection Service, a series of call centers operated by the IRS Collection Division and staffed by IRS collection representatives. The IRS Automated Collection Service primarily computer-generates collection letters and then responds via telephone call to those taxpayers that reply to such letters.
Forms 433A and 433B request the following:
- Are you a party to a lawsuit?
- Have you have ever filed bankruptcy (if so, provide details of the filing)?
- In the past 10 years, have you lived outside of the U.S. for more than six months? (If so, this time extends the statute of limitations for IRS collection.)
- Are you the beneficiary of a trust, estate, or life insurance policy?
- Are you a trustee, fiduciary or contributor of a trust?
- Do you have a safe deposit box, and if so, where is it and what are the contents?
- In the past 10 years, have you transferred any assets out of your name for less than their full value?
- Any increase or decrease in income anticipated (asked on 433B only)?
Internal Revenue Manual (5.15.1.1 (3) allows Revenue Officers to use Form 433F if a taxpayer is a wage earner and owes less than $250,000 in income taxes, or less than $100,000 for a trust fund recovery penalty. However, Form 433F will rarely be used by most Revenue Officers who prefer the higher level of information provided in Forms 433A or 433B. While Form 433A requests basic personal information such as date of birth, driver’s license number, and the phone number of the taxpayer’s employer, Form 433F does not. The 433B further requires disclosure of any business officers, partners, and major shareholders. Again, the 433F does not.
Sailing the waters of financial disclosure to the IRS can be a risky proposition based upon the requirements to use certain forms and other documentation. If you have received a letter from the IRS requesting financial information, call THE TAX EXPERTS at the Thorgood Law Firm www.thorgoodlaw.com for a FREE consultation. Call 212-490-0704 today.
