Form 433-A (OIC) Walkthrough: Section by Section

Form 433-A (OIC) is the financial statement the IRS actually decides your offer on — the examiner’s worksheet for your reasonable collection potential. Individuals and sole proprietors file it (business entities file Form 433-B instead). This walkthrough goes section by section through the current revision: what to enter, which document proves it, and where applicants quietly inflate their own minimum offer. The IRS’s Form 656-B booklet introduces this form as its Step 2; this page is the field-level detail the booklet compresses.

General tax information, not tax or legal advice. Always download the current revision of Form 433-A (OIC) from IRS.gov — figures and boxes change between revisions.

Before you start: who completes which parts

• You complete the form for yourself; if married, household information is included even when your spouse does not owe (see the FAQ — the household rules are the form’s biggest trap).
• Sole proprietors also complete the self-employment section — your business income flows here, not onto a 433-B.
• Business entities (corporations, partnerships, entity LLCs) stop here and use 433-B for the business, while owners may still owe individual 433-A statements.

Section 1 — Personal and household information

Names, address, marital status, household members and dependants. This section quietly sets two numbers used later: your family size (for the national expense standards) and the household whose income the IRS will examine. List dependants accurately — they raise your allowable expenses and lower your computed future income.

Section 2 — Your assets (what becomes “net realizable equity”)

Line by line: cash/bank accounts, investments, retirement accounts, real estate, vehicles, other valuable property. For each: current value, amount owed against it, equity. Method the examiner will apply:

• Most assets are taken at quick-sale value ≈ 80% of fair market value, minus encumbrances
• Bank balances are reduced by a $1,000 exclusion plus one month of allowable living expenses
• Retirement accounts are counted at what you could actually withdraw (net of taxes/penalties on withdrawal) Attach: recent statements for every account, loan payoff figures, and a valuation basis for real estate/vehicles (the examiner will re-value anything that looks optimistic — see mistakes).

Section 3 — Self-employment information

Business name/type, EIN, business assets and debts, and business income/expenses (sole proprietors). Your business profit feeds the income section; business equipment essential to producing income gets more favourable treatment than passive assets — identify it as such.

Section 4 — Monthly income and necessary living expenses

The heart of the form. Income: wages (yours and the household’s), self-employment net, rental, Social Security, pensions, support received — gross monthly, averaged where it fluctuates. Expenses: claimed necessary living expenses, tested by the examiner against the Collection Financial Standards:

• National standards (food, clothing, personal care) — a fixed allowance by family size; you get the standard, not your receipts, if you claim more
• Local standards (housing + utilities by county; vehicle ownership + operating costs by region)
• Other necessary expenses when documented: health insurance, court-ordered payments, childcare enabling work, current-year taxes The bottom line of this section — total income minus total allowed expenses = monthly remaining income — is the single most important number on the form.

The minimum-offer calculation (the boxes at the end)

The form closes by combining the two halves (the 656-B worksheet mirrors this math — practice it on the worksheet page):

• Asset component = total net realizable equity from Section 2 (the form’s Box A total)
• Future-income component = monthly remaining income × 12 (lump-sum offer) or × 24 (periodic) (the G/H computation)
• Minimum offer = asset component + future-income component If your Form 656 offer amount is below this figure, expect rejection on arithmetic.

Documents checklist (attach, do not describe)

• Bank/investment statements — recent 3–6 months (12 for self-employment income averaging)
• Pay statements / income proof for all household earners
• Mortgage/loan statements showing balances claimed
• Expense proof for anything above standards (medical, court orders, special circumstances)
• Business financials if self-employed (recent profit & loss)

Frequently asked questions

If my spouse doesn’t owe the taxes, do I include their income in my 433-A OIC? Yes — the IRS FAQ answers this directly: the form requires total household income, including a non-liable spouse’s, because household expenses are shared. The IRS then allocates: the non-liable spouse’s share of income relative to shared expenses is accounted for in the computation, so including it is not the same as making them liable for your tax.

Do I qualify for Low-Income Certification? The question is printed on Form 656 (and referenced through the booklet): certification turns on household income vs 250% of the federal poverty level. It changes fees/payments, not this form’s math — test and mechanics on the fee page.

How do I know if an offer is right for me? Section 4’s bottom line plus Section 2’s equity answer it arithmetically: if the resulting minimum offer is far below your balance and reachable, the offer is viable (IRS FAQ framing). Run it first in the calculator before completing the real form.

General tax information, not tax or legal advice. Sources: Form 433-A (OIC) current revision; Form 656-B booklet (Steps 2 and the worksheet); IRS OIC FAQs (household-income answer); Community Tax 433-A explainer; IRS Collection Financial Standards. Reviewed 2026-10-22.