Tips and Instructions for Form 433-D
If you want to make monthly payments on your tax debt, the IRS will typically send you Form 433-D
. You use this form to finalize your installment agreement and authorize payments from your checking account, and in some cases, you can even use this form to apply for a payment plan. To get help now, contact us at the Timothy S. Hart Law Group, PC, or keep reading for more details.
IRS Form 433-D Definition
Form 433-D (Installment Agreement) is a single-page form that outlines the main terms of your installment agreement, including the total due and monthly payment amounts. The back of the form lists the requirements for your payment plan and the reasons the IRS may put your plan into default. By signing this form, you agree to abide by the IRS’s rules for installment agreements. If relevant, you may also use this form to set up automatic monthly payments from your bank account.
Who Needs to Complete Form 433-D?
If the IRS approves your request for an installment agreement
, you must complete this form. Form 433-D relates to the following types of installment agreements:
Note there is some overlap of the above agreements. For example, a non-streamlined agreement may require financial verification and direct debit payments. By extension, you could refer to that agreement by any of those names.
How to Complete Form 433-D
Luckily, filling out this form is easy. When you receive the form, the top portion may already be filled out — This happens if you applied online, over the phone, or through the mail and the IRS accepted your agreement. If you’re using the 433-D form to apply for a payment plan, you need to fill out this section on your own with the following details:
- Your name, address, and Social Security Number for individuals.
- Spouse’s name and Social Security Number.
- Name, address, and Employer Identification Number (EIN) for businesses.
- Telephone number.
- Type of tax owed.
- Tax periods related to the tax debt.
- Amount of tax owed.
- Downpayment if any.
- Monthly payment amounts and dates.
- Amounts and dates of future increases or decreases to monthly payments.
Aside from those details, you only need to note your bank account info for direct debits, and you also need to initial the form to show that you agree with the terms of the payment agreement. Note there is a small section at the bottom of the form that the IRS will fill out. This has details about federal tax liens and IRS reviews of your payment plan.
Additional Steps to Take With Form 433-D
In addition to filling out this form and mailing it to the IRS, you may need to take the following steps:
Update the W4 on File With Your Employer
If the IRS fills out Form 433-D for you, check to see if they have ticked the box that says “Submit a new Form W-4 to your employer to increase your withholding”. If so, make sure that you submit a new W4. This is the form that your employer uses to figure out how much to withhold from your paycheck, and the IRS may require you to update this form so that you don’t get behind on your tax payments again.
Create Another Strategy to Stay Current on Your Tax Bill
One of the terms of your payment plan is that you stay current on your future tax filing and payment obligations. In some cases, the IRS requires you to address the reason you got behind before approving your payment plan request. When you’re employed, you fill out a new W4 to increase your withholding, as noted above. However, you may need to take other steps if you’re self-employed. The IRS employee handling your case will provide you with specific advice about your situation.
Set Up Automatic Payments or Take Other Steps as Required
Arguably, the main purpose of the 433-D form is that it allows you to set up direct debits for your monthly payments. To do so, you need the routing and account number for your bank account. If you owe less than $25,000, you don’t need to set up direct debits, and if you prefer not to, you should follow the instructions on the back of this form for mailing in payments. Note that even if you don’t receive a payment voucher from the IRS, you still need to make your payments on time. Taxpayers who owe over $25,000 and don’t set up direct payments can do one of the following: 1) Set up payroll debits so that their employer withholds the monthly payment and sends it to the IRS, or 2) File Form 433-F to provide the IRS with additional details about their financial situation.
Talk to the IRS About Tax Liens
If the IRS has not already filed a tax lien
, you should request that the agency doesn’t file a lien. After you complete this form, the IRS will note if a tax lien has already been filed, if one should be filed, or if one will only be filed if you default on your payment arrangement. Whenever possible, you want the IRS to only file a lien in cases of default. That way, there’s no public record of your tax debt, making it easier to get loans and sell property.
Make a Plan to Pay on Time
When you’re on an IRS installment agreement, you need to be able to make your payments on time and in full. Go over your budget carefully to ensure that you can afford these payments and your future tax liabilities. Unfortunately, a significant portion of people default on payment arrangements because they cannot make the monthly payments. If you’re in doubt, talk with a tax pro. They may suggest a different option to you such as an offer in compromise
, or they may advise you to offer lower monthly payments.
Ask for Penalty Relief
Ideally, you should always ask for penalty relief
. As penalties can reach up to 50% of your balance, they increase your debt significantly. The IRS generally removes penalties if this is your first offense or if you had “reasonable cause” which just means that events outside of your control caused you to pay or file late.
FAQs About Form 433-D
If you have more questions about this form, you are certainly not alone. Here are some of the most common questions. If you have other concerns, contact us directly.
Should you file Form 433-D or Form 9465?
Generally, you use Form 9465 to request a payment plan, and then, you use Form 433-D to finalize the payment plan. If you are filing a return that shows a balance due and you want to request a payment plan, attach Form 9465 to your tax return — you can do this with paper and electronic filing. If you want to request a payment plan on a tax debt at any other time, you may use either of these forms.
What is the difference between 433-D and 433-F?
Form 433-D sets up direct debits and authorizes the terms of your payment agreement. Form 433-F
shares details about your financial situation so that the IRS can decide whether or not to give you a payment plan. When applying for a payment plan, you may need to complete both of these forms, but typically, the IRS only requires 433-F if you can’t make the minimum payments, you owe over $250,000, or a revenue agent assigned to your case requests a financial disclosure.
Where do you mail Form 433-D?
Return your completed Form 433-D to the address noted in the letter you received with the form, or look for an address in the box labeled “for assistance” near the top right corner of the form.
Get Help With Form 433-D
If you’re behind on your tax bill, we can help you file this form and set up monthly payments. We can also help you explore alternative options if a payment plan doesn’t work with your budget. Want help with your tax problems? Then, contact us today. At the Timothy S. Hart Law Group PC, we specialize in tax debt resolution — we can help you deal with IRS and state tax problems for yourself, your business, a trust, or an estate.