In December 2012 the Internal Revenue Service released updated revisions of the 2 most used forms in the collection environment, Form 433-A, Collection Information Statement for Wage Earners and Self-Employed Individuals, and Form 433-B, Collection Information Statement for Businesses. Both forms were last updated by the IRS in January 2008, so new releases were much anticipated.

Last week PitBullTax Software updated Form 433-A to its latest revision and this week we are planning to finish the new Form 433-B. Our licensees have already received a system notification on what has been changed in Form 433-A, but let us recap here once again what’s new:

·        Bankruptcy filings are now required to disclose not only for the past 10 years, but for the lifetime of the taxpayer.

·        New question is added whether taxpayer is a trustee, fiduciary, or contributor of a trust.

·        Safe deposit box information is now recorded in section “Other Financial Information”, not under Bank Accounts.

·        Question about transferred assets is also moved to “Other Financial Information” section.

·        Vehicles description has been expanded and now includes all-terrain and off-road vehicles. An off-road vehicle is considered to be any type of vehicle which is capable of driving on and off paved or gravel surface.

·        Vehicle information will now have to include license tag and Vehicle Identification Number (VIN).

·        Under Personal Assets it is now required to include intangible assets such as licenses, domain names, patents, copyrights, mining claims, etc.

·        Under Monthly Income, pension and social security of a spouse will now be recorded in separate fields.

·        One of the types of business bank accounts is expanded to “Online and Mobile Accounts”.

·        Under Accounts/Notes Receivable for a business, it is now required to include federal, state and local government grants.  

·        Clarification on how to determine monthly business income and expenses is added: “Use the prior 3, 6, 9 or 12 month period to determine your typical business income and expenses”.

·        And the major change is that no supporting documentation is now required to send with the submission of Form 433-A! However, IRS may request verification of the assets, income and expenses reported AFTER they review your completed form. So it’s better to keep it handy anyway.

However, not sending supporting documentation is not the only factor that makes completion of Form 433-A easier.

Did you know that the recent IRM revision of October 02, 2012 allows Revenue Officers to use Form 433-F, Collection Information Statement, which in the past was used primarily for ACS and toll-free purposes (see IRM 5.15.1.1)?

If you compare both forms, Form 433-A has 6 pages and Form 433-F has only 2. So which one is easier to complete? You bet, Form 433-F. However, there are always exceptions to the rule. Revenue Officers can only accept Form 433-F in these cases:

·        For Trust Fund Recovery Penalty (TFRP) investigations when the individual is a wage earner and the potential TFRP is less than $100,000 (See IRM 5.7.5.2);

·        For self-employed and individual wage earners who owe for IMF liabilities only, with an aggregate balance of assessments less than $250,000.

Form 433-F CANNOT be used for Offer in Compromise cases or for cases designated as Abusive Tax Avoidance Transactions (ATAT).

The PitBullTax Software Community continues to grow and in the next few months we are planning to improve our website and services, as well as introduce new features that will make your experience with us even better. So stay tuned! 

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