IRS Verified Financial Installment Agreement

verified financial installment agreementA verified financial installment agreement is just an installment agreement that requires financial disclosure in order to be approved. If you owe over $100,000 or if your business owes over $25,000, you will need to disclose your financial situation in order to obtain an installment agreement. To qualify, you must submit a Collection Information Statement. That includes information about your assets, income, debts, and expenses.

Even if you owe between $50,000 to $100,000, and you do not use a payment method of direct debit or payroll deduction with your installment agreement, you will be required to disclose financial information.

It is highly recommended that you use a licensed tax professional if you want to improve your chances of success with your application. Generally, the IRS prefers you pay down balances to the former respective thresholds in order to obtain an installment agreement.

Here are the general requirements for an installment agreement requiring financial disclosure:

  • Businesses that owe over $25,000 and individuals who owe over $50,000 and do not want to pay via direct debit or payroll deduction (assessed balance)
  • Completion of Form 9465 (Installment Agreement Request).
  • Completion of Form 433 (Collection Information Statement). There are different versions of this form, but as of 2017, individuals usually need to complete 433-F.
  • Cannot be in bankruptcy.
  • Have not had an Offer In Compromise accepted.
  • Completed all tax returns from previous years.
  • Compliant with IRS payments in the past.
  • Have not had an IRS Installment Agreement in the last five years. There are rare exceptions where new tax liabilities can be rolled into existing Installment Agreements

How To File A Verified Financial Installment Agreement

  • Print and fill out Form 9465 (Installment Agreement Request) or call 1-800-829-1040 to speak to the IRS.
  • Print and complete IRS Form 433 (Collection Information Statement). Generally, 433-B is for businesses and 433-F is for individuals.
  • Send these forms and a copy of your tax return to the IRS. If you efile your return, just send Form 9465 and Form 433 to the IRS. The address varies based on where you live, so you may want to double check the appropriate IRS address.

Special Instructions for Form 433-F

As of 2017, most individuals need to complete Form 433-F. Here is an overview of what to expect on that form.

  • Part A: Accounts and Lines of Credit. List all your financial accounts such as checking accounts, IRAs, 401ks, brokerage accounts, etc. You need to include at least 90 days worth of statements for all of these accounts.
  • Part B: Real Estate. Note your properties including your primary residence, vacation homes, and timeshares. Then, list your monthly payments, and write the equity of each property. Equity is the value of the property minus what you owe on it.
  • Part C: Other Assets. This includes automobiles, boats, and life insurance policies. You also have to note monthly payments and equity.
  • Part D: Credit Cards. List all credit cards, their balances, and your minimum monthly payments. This includes store cards.
  • Section E: Business Information. Note any accounts receivables owed to your business and include information about whether or not your business accepts credit cards.
  • Part F: Employment Information. Share details about your income and your spouse’s income. You need copies of your paystubs and contact details for your employers. You also need to note how often you get paid.
  • Part G: Non-Wage Household Income. Detail other sources of income. This includes alimony, child support, self employment income, rental income, and pension. It also includes unemployment income, social security payments, and interest and dividends.
  • Part H: Living Expenses. Explain what you need to live on and fill in your dependents.  This section includes monthly expenses for rent, food, transportation, mortgages, student loan payments, medical bills, and more. You also need copies of bills for the last three months.