Forms 433-F & 9465

[Snowy]

Hi,

We would like to pay our IRS bill ($33K+) by installment. We can save
several thousand by paying installments this year then paying off the
balance next year when our tax rate drops. This requires filling out both a
9465 (installment) and 433-F (Collection Information Statement). The 433-F
clearly shows have the resources to pay the bill now. Will the IRS then
disallow the installment plan?

I only discovered the 433-F requirement when I started to e-file. The 433-F
requires our every asset which is a many. I would rather avoid that if it
is moot.

Thanks,
Gary

 

[paultry]

Hi,

We would like to pay our IRS bill ($33K+) by installment. We
can save several thousand by paying installments this year
then paying off the balance next year when our tax rate
drops. This requires filling out both a 9465 (installment)
and 433-F (Collection Information Statement). The 433-F
clearly shows have the resources to pay the bill now. Will
the IRS then disallow the installment plan?

I only discovered the 433-F requirement when I started to
e-file. The 433-F requires our every asset which is a many.
I would rather avoid that if it is moot.

Thanks,
Gary

See if this applies to your situation:

http://www.irs.gov/individuals/article/0,,id=149373,00.html

 

[paulthomascpa]

We would like to pay our IRS bill ($33K+) by installment. We can save
several thousand by paying installments this year then paying off the
balance next year when our tax rate drops.

That's not how it works though. Your 2011 tax bill doesn't go down if your
2012 tax bracket changes. Installment payments are a good way to finance
the tax debt if you don't have any other resources to make that payment
with. But that amount isn't changed by any future events except payments.

This requires filling out both a 9465 (installment) and 433-F (Collection
Information
Statement). The 433-F clearly shows have the resources to pay the bill
now. Will
the IRS then disallow the installment plan?

Not necessarily. The 9465 is the automatic installment agreement, and I
believe it's only valid for amounts less than $25k.

I only discovered the 433-F requirement when I started to e-file. The
433-F requires our every asset which is a many. I would rather avoid that
if it is moot.

Unfortunately at the amount you're dealing with, you'll need to complete a
433. Remember to send in all required attachments and supporting documents.
Most 433's I've dealt with end up being 2 inches thick with attachments.

Good luck with it.

 

[removeps-groups]

Not necessarily. The 9465 is the automatic installment agreement, and I
believe it's only valid for amounts less than $25k.

It is now valid for amounts up to 50k. It is still valid for amounts over 50k, but this 433 form is required. Also, if you owe more than 50k and are seriously delinquent then if senate bill 1813 passes, then your passport may be taken away from you.

BEGIN QUOTE http://www.govtrack.us/congress/bills/112/s1813/text

‘SEC. 7345. REVOCATION OR DENIAL OF PASSPORT IN CASE OF CERTAIN TAX DELINQUENCIES.

‘(a) In General- If the Secretary receives certification by the Commissioner of Internal Revenue that any individual has a seriously delinquent tax debt in an amount in excess of $50,000, the Secretary shall transmit such certification to the Secretary of State for action with respect to denial, revocation, or limitation of a passport pursuant to section 4 of the Act entitled ‘An Act to regulate the issue and validity of passports, and for other purposes’, approved July 3, 1926 (22 U.S.C. 211a et seq.), commonly known as the ‘Passport Act of 1926’.

‘(b) Seriously Delinquent Tax Debt- For purposes of this section, the term ‘seriously delinquent tax debt’ means an outstanding debt under this title for which a notice of lien has been filed in public records pursuant to section 6323 or a notice of levy has been filed pursuant to section 6331, except that such term does not include--

‘(1) a debt that is being paid in a timely manner pursuant to an agreement under section 6159 or 7122, and

END QUOTE

 

[Snowy]

This has become moot. I filed an extension and will bring it up with our
local tax advisor. Cannot find out how to get Windows 7 Mail to mark the
text being replied to so used a double line below to separate my response in
case anyone is curious.


-----Original Message-----
From: paulthomascpa
Sent: Tuesday, April 17, 2012 3:51 PM Newsgroups: misc.taxes.moderated
Subject: Re: Forms 433-F & 9465

We would like to pay our IRS bill ($33K+) by installment. We can save
several thousand by paying installments this year then paying off the
balance next year when our tax rate drops.

That's not how it works though. Your 2011 tax bill doesn't go down if your
2012 tax bracket changes. Installment payments are a good way to finance
the tax debt if you don't have any other resources to make that payment
with. But that amount isn't changed by any future events except payments.

This requires filling out both a 9465 (installment) and 433-F (Collection
Information
Statement). The 433-F clearly shows have the resources to pay the bill
now. Will
the IRS then disallow the installment plan?

Not necessarily. The 9465 is the automatic installment agreement, and I
believe it's only valid for amounts less than $25k.

I only discovered the 433-F requirement when I started to e-file. The
433-F requires our every asset which is a many. I would rather avoid that
if it is moot.

Unfortunately at the amount you're dealing with, you'll need to complete a
433. Remember to send in all required attachments and supporting documents.
Most 433's I've dealt with end up being 2 inches thick with attachments.

Good luck with it.





--
Paul Thomas, CPA
www.paulthomascpa.com
Watkinsville, Georgia



========================================================================================================

The question really is: Can we still use the installment plan if we DO have
the assets to pay the tax bill this year. I asked a related question
elsewhere but am not certain I made the situation clear. I understand that
the Roth conversion will be taxed at this year's rate. It is the money to
pay the tax bill on that conversion that is at issue. To pay that bill we
will need to sell assets at this years tax rate (33% fed, 5% Mass.). My
wife retires later this year and we leave Mass. That drops our tax rate to
28%. If we can defer paying ome of that $33K tax bill to next year that
saves us 7% (5% fed + 5% Mass - 3% interest) + any AMT (likely more than
$1K). I hope that is clear. Also, the limit was raised to $50K from $25K.

The 433-F requires listing all our assets. I would prefer not do so unless
I am certain it is worthwhile.

Thank you for your responses,
Gary