There are few financial dilemmas that compare to a tax debt. How you handle one can mean the difference between a tolerable resolution and a burdensome repayment plan. This variance in terms, believe it or not, can come down to how much financial information you provide to the IRS.
While honesty is always the best policy when it comes to handling your taxes and all things related, you may or may not have to disclose certain details when executing a resolution. Before you consider your options, take a look at what 433A entails. The devil is in the details and the details that the IRS demands are myriad:
First, you'll be instructed to provide personal specifics. Among the items you'll need to include are your name, phone number, address, age, information about your spouse and any dependents. Keep in mind that the IRS is attempting to get a complete picture of who you are and what financial support and obligations you have.
In addition to who you are, the IRS wants the details of your employment and that of your spouse. These items come to bear when the IRS determines your ability to sustain (or not sustain) month over month payments. More to the point, this information will be used to calculate what you and your significant other have the ability to pay toward your debt.
Coupled with your employment facts are your peripheral financial resources. Form 433A requires you to itemize assets such as property, equity in any property, vehicles, available credit and money you have in your bank account(s). Here again, once you provide this information to the IRS, they know the precise limits of your financial capability.
In the event that you and/or your spouse operate a business, you're required to disclose all the financial specifics. Depending on how your business is structured, your income may be entwined with these details. Regardless, the IRS expects a complete picture of what you have coming in from any entrepreneurial endeavors.
No matter what your circumstances, it's critical to remember that it may not be in your best interest to provide the IRS with an itemization of your income and monthly bills. This information can limit your ability to obtain a repayment plan that is ideal for your budget. You may be able to establish a formal tax resolution that simultaneously prevents the IRS from seeing your finances. The smartest course of action is to consult with a licensed tax professional before submitting any IRS request for information. Professional tax assistance can save you precious time and, in many cases, protect you from an enormous monthly bill.