Form 433-B (OIC) vs. Form 433f 2023-2024

Welcome, my fellow tax professionals. In this video, we'll be discussing IRS Form 433-B, the Collection Information Statement for businesses. I'm your host, attorney Robert Shallow, author of the course "IRS Form 433-B: Understanding the Offer and Compromise." Form 433-B is crucial as it explains the income, expenses, and assets of the taxpayer. These calculations enable tax professionals to accurately determine the offer amount for the offer and compromise. Any miscalculations by the tax professional could result in the taxpayer overpaying or underpaying their tax liability, leading to the rejection of the offer. Therefore, a careful study of Form 433-B is essential for business taxpayers. Now, let's delve deeper into Form 433-B. This form is specifically designed for corporations and LLCs, unlike Form 433-A, which is utilized by individual wage earners and sole proprietorships to settle back tax liability. Form 433-A will be explored in a separate course. Form 433-B requires the taxpayer to identify and value various assets in the asset section. These assets include cash, business bank accounts, accounts receivables, business vehicles, business equipment, inventory, and real estate owned by the business. Moving on to the income section of Form 433-B, the taxpayer must disclose their gross sales, gross rental income, as well as other forms of income such as interest income and dividend income. All sources of income must be accurately identified. Now, let's discuss the expense section of Form 433-B. As discussed in previous courses, the IRS only allows necessary expenses, which are expenditures directly related to the production of the business's income. 100% of these necessary expenses can be deducted from future income when calculating the business's reasonable collection potential. Form 433-B also identifies the taxpayer's allowable expenses related to gross wages and salaries, rent and real property leases. Additionally, expenses for inventory purchased, supplies, utilities, telephones, vehicle loans, leases,...