What Is IRS Form 433-D?

Dealing with tax forms can be complicated, overwhelming, and time-consuming. This is especially true if you’re behind on your tax return filings or you owe an amount you can’t afford to pay. Many individuals and businesses decide to put off moving forward because taxes can be so stressful. Unfortunately, this leads to building back taxes, penalties, and interest.

One form you may have to complete with the IRS is Form 433-D. This form comes up when you’re applying for a payment plan, meaning you can’t afford to pay off your bill in one lump sum payment. The IRS is usually willing to work with you if you let them know about your situation and have a history of good tax compliance.

Learn what IRS 433-D, Installment Agreement, is used for, how installment agreements work, and how to complete the process with the IRS.

What Are 433 Forms Used For?

The IRS created a few types of Form 433 for taxpayers to apply for tax relief, including offers in compromise, installment agreements, and the temporary currently not collectible (CNC) status. These options provide you with a few ways to pay off what you owe the IRS or avoid collections for a period of time until your financial situation improves.

Each Form 433 serves to collect important financial information the IRS needs when a taxpayer can’t afford their tax bill or is applying for an alternative arrangement. Here’s a brief look at the different types of Form 433 available and who uses which one:

• Form 433-A, Collection Information Statement for Wage Earners and Self-Employed Individuals: This form is for individuals and self-employed taxpayers, typically those who meet with a revenue officer during a field collection.
• Form 433-B, Collection Information Statement for Businesses: 433-B is for businesses, including corporations, S corporations, LLCs, and partnerships.
• Form 433-D, Installment Agreement: This is the installment agreement and direct deposit consent form for taxpayers who have been approved for a payment plan.
• Form 433-F, Collection Information Statement: This form is also used by individuals, but it differs from Form 433-A in that A is usually collected by a revenue officer, and F isn’t as detailed as A.
• Forms 433-A and 433-B (OIC), Offer in Compromise: These forms are used for individuals or businesses, respectively, when requesting an offer in compromise.

All of the Forms 433 require individuals or businesses to provide information about themselves and their financial situation. The IRS reviews the information to determine the next steps for the taxpayer, such as approving an offer in compromise or temporarily delaying collections.

What Is IRS Form 433-D?

Taxpayers will receive Form 433-D when setting up a payment plan, also known as an installment agreement. This form acts as the agreement between you and the IRS.

IRS installment agreements allow you to pay off your tax debt over time in monthly installments, instead of paying all at once. You have both short-term and long-term payment plan options, depending on your unpaid balance.

Form 433-D asks for detailed information from the taxpayer, including:

• Name and address
• Social Security number or Employer Identification number
• Type of taxes owed
• Applicable tax periods
• Amount owed
• Penalties owed
• Direct debit authorization information, including bank account and routing numbers

The bottom of Form 433-D is left blank for IRS use only. The IRS also provides the terms of the installment agreement on the back of the Form 433-D, which the taxpayer has to consent to. These forms can be hard to sift through, so make sure you talk to a tax expert as you’re evaluating your options and applying for IRS tax relief.

Who Uses Form 433-D?

Anyone who has applied for an installment agreement and has been approved may receive Form 433-D. However, remember that the IRS will always let you know if they need you to complete and return this document. 

Completing the form indicates that you are agreeing to the installment agreement and providing your bank information to the IRS. Note that you may still need to complete this form to indicate your agreement, even if you don’t want to pay via direct deposit each month.

When you have an active payment plan in place, the IRS usually cannot levy your property or take collections actions against you, nor when the agreement request is pending.

How Is Form 9465 Different from Form 433-D?

Form 9465, Installment Agreement Request, is also involved in the installment agreement process. You use this form to request an installment agreement, and if the IRS approves your request, Form 433-D comes next to finalize the agreement with you.

Form 9465 requires this information from you:

• The tax form that your request applies to (e.g., Form 1040)
• Your Social Security number and contact information
• The total amount you owe, according to your tax return or IRS notice
• Any other balances due
• The amount you’re sending with your request
• The amount you owe after that payment
• The amount you can afford to pay each month
• The date you want to make your payments each month
• Your direct deposit information
• Additional information about you and your household

The IRS suggests entering a large suggested payment amount, if possible, since your unpaid balance will continue to accrue penalties and interest until you pay it off. If you don’t list a payment amount for the agreement, the IRS will determine the amount by dividing what you owe by 72 months. 

You may not want this agreement to extend that long, so think through the amount you can realistically afford each month. Talk to a tax attorney when you’re not sure what to do when completing Form 9465.

How to Submit IRS Form 433-D

So, what do you do once you’ve completed Form 433-D? Follow these steps to submit this form:

• Provide accurate, updated information: Double-check all the information you send to the IRS to ensure accuracy. 
• Locate where to mail Form 433-D: The documents the IRS sends you will contain all the information you need to submit the form. Send Form 433-D to the address provided and follow all instructions closely.
• Pay attention to deadlines: Any IRS notices and documentation will also include the deadline for returning your Form 433-D, so pay close attention to these due dates.
• Follow all terms of the agreement: Keep a copy of the installment agreement for your records, and create a system for paying your monthly payments by your chosen due date. 

Follow these steps and stay compliant with your agreement to ensure a smooth process when paying off your tax debt. If you have trouble paying your monthly amount or are unsure about the terms of your plan, talk to a tax professional to avoid any further issues. 

Other Alternatives if You Can’t Afford Your Monthly Payment

The IRS also offers additional relief options if you can’t pay your tax bill. Installment agreements are common because they’re usually pretty simple to set up. However, here are a few additional options other than the traditional Form 9465/433-D process:

Apply for a Payment Plan Online

First, you may not have to go through the process of filing Form 9465. The IRS states at the top of this form that if you owe $50,000 or less in taxes, you could avoid filing the form and instead set up an installment agreement online. (Visit www.irs.gov/OPA to do this.) Applying online can help you speed up the process and create less work for all involved.

Offer in Compromise

This request also involves a Form 433: either Form 433-A (OIC) or Form 433-B (OIC) for businesses. With this type of request, you would send in an offer along with financial information that shows you are dealing with an issue that prevents you from paying your full balance. Your job is to prove to the IRS that your offer amount is all you can pay, so you’re essentially requesting to settle your tax debt with them. The IRS will most likely approve your offer if what you sent them is all they can reasonably expect to collect from you.

CNC Status

The IRS may also approve temporarily delaying collections on your account with CNC status. This requires showing them that you are dealing with a financial hardship of some kind. But remember that this status is only temporary, and you will have to pay off your full tax bill when your situation improves.

Tax Return Filing Extensions

If you’re having trouble filing your tax return by the deadline, you can also request an extension, which pushes your deadline back six months. Many taxpayers decide to do this if they need more time to file, but warning: you still have to pay what you owe by the April 15 deadline, even with a filing extension.

Many taxpayers think that if they’re unable to pay what they owe, they should just avoid the tax deadlines and hope for the best. Or, they submit false information to the IRS in hopes it will be overlooked and they won’t have to pay. The IRS compares the information it receives and monitors it for discrepancies, so the agency has ways to discover underreported income, and it tracks missed deadlines.

Your best bet is to work with the IRS on one of the tax relief options. Being open and honest about your situation will lead to the best outcome. Always talk through your options with a tax attorney, who can guide you through the process of dealing with the IRS.

Finding Help with IRS Installment Agreements

You may know that you’re not able to pay your tax bill in full, but you don’t know what to do next. To stay in good standing with the IRS and avoid further penalties, interest, and even criminal charges, work with a tax expert as soon as possible.

The team at Damien’s Law is here to guide you through any situation where you would need to complete IRS Form 433-D, or any other type of Form 433. We help you understand your tax relief options and will guide you through IRS communications as well. Contact Damien’s Law today to learn more about our legal team and tax services.

FAQs about IRS Form 433-D

When would I need to apply for an installment agreement?

The IRS suggests applying for a payment plan if you don’t think you’ll be able to pay your full tax bill on time. This option helps you avoid collections and an eventual federal tax lien on your property from the IRS.

Can I send Form 433-D with Form 9465?

Yes, you can. However, the IRS isn’t guaranteed to approve your request in Form 9465 that would warrant Form 433-D.

Are there costs associated with IRS payment plans?

For short-term payment plans, which are for 180 days or less and apply to balances less than $100,000, there is no cost to apply for a payment plan. 

For long-term payment plans, if you pay by direct debit there is a $31 setup fee to apply online or a $107 setup fee to apply by phone, mail, or in person unless you qualify as low-income. If you pay another way, the setup fee is $130 for online, $225 for phone, mail, or in-person, and $43 for low-income taxpayers.

Where do I mail IRS installment agreement Form 433-D?

The mailing address varies. Read the instructions provided on your notice or documents from the IRS. The agency will be clear about how to send or mail in your Form 433-D. Also, be sure to send it by the deadline provided.