NOTE: This headliner is current through the publication date. Since changes may have occurred, no guarantees are made concerning the technical accuracy after the publication date.
Headliner Volume 223
February 19, 2008
The Internal Revenue Service has revised the Collection Information Statement Forms 433A and 433B which are used for gathering current financial information necessary to determine how a wage earner, self-employed individual or business can satisfy an outstanding tax liability.
The changes described below apply to Form 433-A, Collection Information Statement for Wage Earners and Self-Employed Individuals, Form 433-B, Collection Information Statement for Businesses, and Publication 1854, How to prepare a Collection Information Statement (Form 433-A).
The revisions include:
New Business Information Questions
Both forms now include new questions regarding business websites, limited liability companies and Federal Tax Deposits.
Federal Government Contracts
Questions were added to address federal government contractors. Federal government contract numbers and contact information are requested under the Accounts/Notes Receivable section.
Asset Information
The format of both Form 433-A and Form 433-B was changed to allow more space for detailed information regarding assets, including the location of assets and leased property ownership information.
Stored Value Cards
Bank account sections now request information regarding stored value cards, such as payroll cards, government benefit cards, prepaid debit cards and telephone cards. Taxpayers who do not have their paychecks deposited into a bank account but receive their wages on a payroll card should include that asset under Personal Bank Accounts.
E-Commerce
New sections were added to both forms for Web-based business and online merchant account information, including third-party processors and merchant account providers that a business employs to accept credit card payments.
Taxpayer Living Outside the U.S.
A question has been added to Form 433-A to identify taxpayers that have resided outside of the United States for periods of six months or longer.
Investments
The Investments section on Form 433-A requires information from the individual on all corporations, partnerships, limited liability companies or other business entities in which he or she is an officer, director, owner, member, or otherwise has a financial interest.
Self-Employed Taxpayers
Form 433-A provides additional sections for business assets. Wage earners will complete pages one through four. Self-employed individuals will complete pages one through six.
Self-Employment Income and Expenses
Form 433-A also includes a separate section for sole proprietor income and expenses. If the taxpayer is not a wage earner or sole proprietor filing
Schedule C, the taxpayer will complete Form 433-B.
Net Income for Business
The explanation for Net Income for Business has been expanded to address duplicated and paper deductions when using Schedule C. Schedule C includes deductions for paper expenses such as depreciation and depletion. It may also include duplicated deductions. For example: expenses for the business use of a home may be deducted on Schedule C and included in the Housing and Utility allowance on Form 433-A. If a taxpayer uses Schedule C to determine Net Income for Business, deductions for duplicated and paper expenses must be added back into the net income figure.
Allowable Living Expenses
On Form 433-A, the expense items on the monthly income and expense statement have been revised to reflect the changes to the Allowable Living Expenses. There are separate line items for vehicle ownership costs and vehicle operating costs as well as health insurance and out of pocket health care costs.
Publication 1854
Publication 1854 now incorporates several revisions, including a new section that clarifies which taxpayers should complete Form 433-A, explanations for business expenses, and additional descriptions for expenses.
The revised Collection Information Statement Forms are now available on IRS.gov and will be included on the 2008 IRS Tax Products CD/DVD. The revised Publication 1854 will be available on March 1, 2008 when the 2008 Allowable Living Expense standards are released.
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