What is Form 433B? How is Form 433B used by the Internal Revenue Service? These are common questions a business may ask their tax attorney or CPA if they owe taxes to the IRS and have been asked to complete Form 433B. The article below has been drafted by a Denver tax attorney at The McGuire Law Firm to explain and discuss Form 433B.
Form 433B is a collection information statement for businesses used by the Internal Revenue Service when a business owes taxes to the IRS and the IRS is requesting information to determine what the business can or cannot pay to resolve the tax debt. Form 433B would be used for multi-member LLCs, certain partnership and corporations.
Form 433B acquires information about a taxpayer such as:
– Name, address and contact information of the business
– Owners of the business and ownership interests
– Business assets including fair market value, amount owed on an asset or leased assets, or business equipment (business assets may include equipment, vehicles, tools, real property)
– Business income and expenses (generally an income statement can be provided)
– Business bank accounts- both checking and savings accounts
This information is used by the Internal Revenue Service to determine the businesses collection potential, meaning what the business can pay on a monthly installment agreement to resolve any tax debts. If a business plans to submit an offer in compromise, then the business would prepare and submit Form 433B OIC. Businesses, like individuals may be able to settle their tax debts with the Internal Revenue Service through the IRS Offer in Compromise Program.
If a business owes 941 employment taxes, this tax debt may create another issue for the business owners or other individuals involved with the business. The trust fund portion of the 941 taxes (what is withheld from an employee’s paycheck) can be personally assessed to the willful and responsible parties of the business through the Trust Fund Recovery Penalty. This tax debt may be assessed to one or more individuals and each party is held jointly and severally liable, meaning the IRS can collect all of the trust fund amount from one individual even if multiple individuals are responsible for the trust fund recovery penalty.
If your business owes taxes to the Internal Revenue Service, it is recommended that you contact a tax attorney or tax professional. Most will offer a free consultation and could help you resolve the issue with the IRS and potentially save money. A Denver tax attorney at The McGuire Law Firm can assist you individually or your business in resolving a tax debt with the IRS or another tax matter.
You can contact The McGuire Law Firm at 720-833-7705 or John@jmtaxlaw.com to speak with a Denver tax attorney and schedule your free consultation.