When is Form 433-B required?

Form 433-B is required when a business: (1) requests an installment agreement for more than $25,000; (2) submits an Offer in Compromise (OIC); (3) requests Currently Not Collectible (CNC) status; or (4) is being evaluated for collection action by the IRS. The form provides a complete financial picture of the business's assets, liabilities, income, and expenses.

How does the IRS calculate a business's ability to pay?

The IRS calculates the business's ability to pay based on: (1) net realizable equity in assets (quick sale value minus secured debt); (2) monthly net income (gross income minus allowable expenses). The IRS will generally allow necessary business expenses but may challenge excessive expenses. The ability to pay determines the minimum acceptable OIC amount.

What is the difference between Form 433-A and Form 433-B?

Form 433-A is for individual taxpayers (including sole proprietors). Form 433-B is for businesses (corporations, partnerships, LLCs taxed as corporations or partnerships). If a business owner has both personal and business tax liabilities, both forms may be required.

What assets does the IRS consider on Form 433-B?

The IRS considers: cash and bank accounts, accounts receivable, investments, real property, vehicles, equipment, and other business assets. The IRS uses the 'quick sale value' (80% of FMV) for most assets. Assets pledged as collateral are valued net of the secured debt. The IRS can levy on all business assets to collect unpaid taxes.

Can a business get Currently Not Collectible (CNC) status?

Yes. A business can be placed in CNC status if it cannot pay its tax liability without jeopardizing its ability to continue operating. CNC status temporarily suspends collection activity. However, interest and penalties continue to accrue. The IRS will periodically review CNC status and resume collection if the business's financial situation improves.

IRS Form — Collection Information Statement (Business)

Form 433-B — Collection Information Statement for Businesses

Form 433-B is the business equivalent of Form 433-A. It is used by the IRS to evaluate a business's ability to pay its tax debt. The form collects detailed information about business assets, income, expenses, and liabilities. For tax professionals, Form 433-B is used in Offer in Compromise applications, installment agreement negotiations, and Currently Not Collectible (CNC) status requests for business clients.

✓ Verified 2026 Form 433-B Rules

✓ OIC Business Eligibility Rules Confirmed

✓ CNC Status Rules Confirmed

✓ Installment Agreement Rules Confirmed

OIC

Required for Business Offer in Compromise

CNC

Currently Not Collectible — Suspends IRS Collection

Installment

Required for Business Installment Agreements

IRC §6343

Currently Not Collectible Authority

Key Rules and Authority

Rule	Detail
OIC Reasonable Collection Potential	Assets + future income capacity
CNC Threshold	Expenses exceed income
Installment Agreement	Up to 72 months for businesses
Asset Valuation	Quick sale value (80% of FMV)
Accounts Receivable	Included in asset calculation
Equity in Assets	Included in RCP calculation

Form 433-B vs. Form 433-A — Business vs. Individual

Form 433-B is for businesses (corporations, partnerships, LLCs) while Form 433-A is for individuals (sole proprietors, self-employed individuals). When a sole proprietor owes business taxes, they use Form 433-A (which includes business income and expenses). When a corporation or partnership owes taxes, the business files Form 433-B. If the business owner is personally liable (e.g., Trust Fund Recovery Penalty), the individual also files Form 433-A. The IRS evaluates the business's Reasonable Collection Potential (RCP) — the sum of the quick sale value of business assets plus the present value of future income above allowable expenses.

Frequently Asked Questions

My client's business owes $500,000 in payroll taxes. Can they get an Offer in Compromise?

Yes — businesses can submit an Offer in Compromise using Form 433-B to document their financial condition and Form 656 to submit the offer. The IRS will evaluate the business's Reasonable Collection Potential (RCP) — the quick sale value of business assets plus the present value of future income above allowable expenses. If the offer amount equals or exceeds the RCP, the IRS will generally accept it. However, payroll taxes (trust fund taxes) are subject to special rules — the Trust Fund Recovery Penalty (TFRP) makes responsible individuals personally liable for the employee portion of payroll taxes, regardless of the business's OIC. Both the business and the responsible individuals must address their respective liabilities.

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Form 433-B — Collection Information Statement for Businesses

Key Rules and Authority

Form 433-B vs. Form 433-A — Business vs. Individual

Frequently Asked Questions

Master Business Tax Collection Resolution for Your Clients

Related Resources

Free Access for Tax Professionals

Form 433-B — Collection Information Statement for Businesses

Key Rules and Authority

Form 433-B vs. Form 433-A — Business vs. Individual

Frequently Asked Questions

Master Business Tax Collection Resolution for Your Clients

Related Resources