What is Form 433-D?
Form 433-D, Installment Agreement, is used by taxpayers who are unable to pay the whole amount of their imposed taxes and authorizes a direct debit payment arrangement for an IRS installment agreement. This means, using Form 433-D, they can arrange monthly payments.
Taxpayers who can use Form 433-D to set up a direct debit installment arrangement are those who owe federal income taxes. These taxpayers include individual taxpayers and wage earners, business owners, self-employed professionals, and out-of-business proprietors.
If a taxpayer deems that making monthly payments would result in a significant financial hardship, they may opt to use Form 433-A, Collection Information Statement for Wage Earners and Self-Employed Individuals; Form 443-B, Collection Information Statement for Business; or Form 433-F, Collection Information Statement, depending on their taxpayer status and situation.
When a taxpayer would want to set up a monthly installment agreement whereby he or she will mail payments by check, money order, or direct debit, he or she should use Form 9465, Installment Agreement Request.
If you owe more than $25,000 in taxes or collections, it is recommended that you file Form 433-D to help you or your company get back to good taxpayer standing.
Filing Form 433-D can keep a business lien-free and enable it to pay down its tax debt legally and manageably.
If even after the approval of your application for an installment agreement you still missed your agreed-upon monthly payments, failed to pay other federal tax debts by their due dates, and failed to provide financial information as requested by the IRS, the Internal Revenue Service (IRS) may terminate your agreement. Therefore, if you cannot make a payment, you must immediately contact the IRS or your attorneys about your options.
If in the event the IRS terminates the agreement, it can reinstate it but applicable fees will apply.
How to Fill Out Form 433-D?
There are two pages for Form 433-D — the IRS copy and the taxpayer’s copy. They are identical so after filling out the first page of the form, you can simply copy the information to the second page.
Form 433-D would require your personal information, the amount you owe, the amount you will pay each period, and the terms and conditions.
Follow the instructions below to fill out Form 433-D correctly.
Name and Address of the Taxpayer(s)
Enter your full legal name and residential address. If filing with your spouse, enter his or her full legal name and address.
Mark the checkbox below this item to submit a new Form W-4 to your employer to increase your withholding.
Social Security or Employer Identification Number (SSN/EIN)
Enter your SSN or EIN. Also, enter the SSN or EIN of your spouse.
Enter your home phone number and/or work, cell, or business number.
Kinds of Taxes
Enter the form numbers of the kinds of taxes that you owe.
Enter the tax periods of the taxes you owe.
Amount Owed as of
Enter the amount of tax you owe as well as the latest date when you still owe them.
I/We agree to pay the federal taxes shown above, PLUS PENALTIES AND INTEREST PROVIDED BY LAW, as follows
Enter the amount you wish to pay initially, the amount you wish to pay each subsequent month, and the dates you will pay them.
I/We also agree to increase or decrease the above installment payments as follows
If you wish to increase or decrease the amount of your monthly payment in the future, indicate the date of increase (or decrease), the amount of increase (or decrease), and the new installment payment amount.
Provide your initials in the appropriate box and sign on the appropriate space to agree to the terms of the agreement, as provided in the form, if it is approved by the Internal Revenue Service.
Only complete this section if you choose to make payments by direct debit.
a. Routing number
Enter the account number of the checking account from which the IRS will withdraw your payment. The first two digits of the routing number must be 01 through 12 or 21 through 32. Do not use a deposit slip to verify the number because it may contain internal routing numbers that are not part of the actual routing number.
b. Account number
Enter the routing number of the checking account from which the IRS will withdraw your payment. Include hyphens but omit spaces and special symbols. Provide the numbers starting from the left and leave and unused boxes blank.
Debit Payments Self-Identifier
If you are unable to make electronic payments through a debit instrument by providing your banking information above, check the box “I am unable to make debit payments.” By not checking the box, you indicate that you are able but choosing not to make debit payments.
After ensuring that you have accomplished Form 433-D completely and accurately, provide your signature, enter the date when you signed the form, and your job title (if you’re a corporate officer or partner). If paying is a joint liability, your spouse should provide his or her signature and the date when he or signed the form.
Frequently Asked Questions About Form 433-D
Where to submit Form 433-D?
Submit the first page of Form 433-D to the address on the letter that came with it or to the Internal Revenue ServiceDepartment of Treasury. If you are unsure where to mail it, you can call the applicable number in the “For Assistance” section found in the top-left part of the form.
How to pay the IRS?
You can pay through direct debit or through check. If you choose to pay through direct debit, fill out the section above regarding direct debit. If paying via check, every check should be payable to the “United States Treasury,” then mail the check to the Internal Revenue Service Department of Treasury. Make sure to provide your Social Security Number (SSN) or Employer Identification Number (EIN) for each payment.
If by any chance you wish to pay double and skip a payment later, you must contact the IRS first.
What if I have questions regarding my installment payment?
If you have questions regarding your installment payment, whether you are unable to make your monthly payment or you accrue additional liability, you may contact the following:
- For businesses, contact 1-800-829-0115
- For self-employed individuals or business owners, contact 1-800-829-8374
- For individuals who are wage earners, contact 1-800-829-0922
What is the difference between IRS Form 433 D and Form 9465?
Form 433-D, Installment Agreement, and Form 9465, Installment Agreement Request, are both used to request an installment agreement with the Internal Revenue Service. However, they are different in terms of payment methods.
While Form 433-D is filed to make a debit installment agreement with the Internal Revenue Service, Form 9465 is filed to make an installment agreement by paying taxes by check, money order, or direct debit.
Taxpayers who file Form 433-D cannot initiate a payment plan other than a debit installment agreement.
Do I need to file Form 9465 to file Form 433-D?
Yes, you need to file Form 9465 before you file Form 433-D. It is important that you understand the process.
Filing Form 9465 means that you are requesting permission to enter into an installment agreement. Form 9465 initiates the process where the Internal Revenue Service will determine whether or not your request should be granted. You cannot file Form 433-D without first filing Form 9465 because Form 433-D is used to complete the installment agreement.
When you file Form 9465, you are required to attach Form 433-A, Collection Information Statement for Wage Earners and Self-Employed Individuals, or Form 433-F, Collection Information Statement.
Form 433-A and Form 433-F are informational forms, providing the Internal Revenue Service (IRS) the details about your income. Once you submit Form 9465 with Form 433-A or 433-F, the IRS will review your financial information and determine if you must enter into an installment agreement.
After filing Form 9465, the Internal Revenue Service will inform you if your request has been approved or denied. If they approve your installment request, they will send you Form 433-D for completion.
What is a debit installment agreement?
A debit installment agreement is a payment plan in which you make monthly installment payments to the Internal Revenue Service. The debits are directly posted to your bank account via an Automated Clearing House (ACH) transaction on the due date of each month's installment. It is similar to how your employer deducts taxes from each paycheck for your withholding amount.
What is the Electronic Funds Withdrawal (EFW)?
When you make an agreement with the Internal Revenue Service (IRS) to pay your liabilities by debit, it is called Electronic Funds Withdrawal (EFW). It means that you must provide your bank information and authorize the IRS to withdraw funds directly from your personal account each month.
What are the advantages of using the Electronic Funds Withdrawal (EFW)?
There are several advantages to entering into an installment agreement using the Electronic Funds Withdrawal (EFW) method.
The most important advantage is that you can avoid making monthly trips to your bank or post office to mail checks. Another advantage of paying by debit is peace of mind, knowing that you have a set due date and amount each month.
You will also avoid penalty fees from the bank or post office, which can add significant expenses to your installment agreement. There is no processing fee to process an EFW if it is part of a direct debit installment agreement with the Internal Revenue Service.
However, you may check with your financial institution to determine if they charge fees for using this service.
What is the disadvantage of using the Electronic Funds Withdrawal (EFW)?
The biggest disadvantage of a direct debit installment agreement is the possibility that you might not have enough funds in your account each month to make the payment. Be certain that you can cover your monthly expenses before deciding on this payment option.
If your bank account has insufficient funds, an Electronic Funds Withdrawal (EFW) will result in Non-Sufficient Funds (NSF) fee. It means that you must pay an additional expense as part of your installment agreement.
Do I need to file Form 433-D if I am filing a joint return?
Yes, you need to file Form 433-D if you or your spouse are filing a joint return or liability.
To file Form 433-D for a joint return or liability, you and your spouse need to provide the following information:
- Social Security Number (SSN) or Employer Identification Number (EIN)
- Bank routing and account numbers for the direct debit of either you or your spouse
- The total amount of income received during the tax year from all sources
- Monthly expenses you and your spouse paid or will pay, such as medical, education, or childcare
What if I cannot make my monthly payment after filing 433 D Form with the IRS?
If you cannot make your monthly payment, contact the Internal Revenue Service at least five days before the scheduled debit date to request an extension. You will need to provide them with your bank routing number, your checking or savings account number, the payment amount to be rescheduled, and the date you would like it debited.
Does the IRS adjust installment payments?
Yes, the Internal Revenue Service may adjust your installment payments if your financial situation or ability to pay your taxes has changed. However, you must prove that the change occurred since you entered into your current installment agreement.
If you do not provide adequate proof of a change in circumstances, the Internal Revenue Service may reject your request for an adjustment.
When filing 433D Form with the IRS, be sure to include any information about your new income or expenses so they can be considered for an adjustment.
How do I know if the IRS received my payment?
Contact your bank or the financial institution where you enrolled your payment plan with the Internal Revenue Service (IRS) at the end of each tax year to receive a copy of your Electronic Funds Withdrawal (EFW) record. This record will provide proof that the IRS received your payment. If you do not receive an EFW record within 30 days of filing Form 433-D, contact the institution that provided the direct debit instructions.
You can also contact the Internal Revenue Service directly to determine if the payment was received. Keep in mind that it may take up to five business days for a direct debit transaction to reflect in Internal Revenue Service records.
How long is Form 433D valid?
Installment agreements can last as long as 72 months but not beyond the statute of limitations on your tax debt. If you manage to pay off your tax liability before the agreement expires, the Internal Revenue Service may require you to refile Form 433-D with updated information.
The Internal Revenue Service does not remove installment agreements for any reason other than full payment of your tax liability or expiration of such agreement. If they discover that an installment agreement is no longer valid, they will attempt to contact you and request a new Form 433-D.
What if I filed Form 433-D and now wish to make a different payment arrangement?
If you file Form 433-D and then realize that you would like to pay your liabilities by check or money order instead, you may contact the Internal Revenue Service directly for inquiries.
Will the IRS let you skip a payment?
The Internal Revenue Service (IRS) may allow you to skip a payment if you pay your tax liability within 30 days after the due date of the payment you skipped.
However, it is uncertain that the IRS will grant your request to skip payment as you must have a valid reason to be eligible. You may be asked to provide evidence, such as a copy of your medical records and or bills, to support your request.
How many times can you set up a payment plan with the IRS?
You can set up a payment plan with the Internal Revenue Service (IRS) as many times as you need as long as you have satisfied your most recent payment plan prior to requesting another one.
Take note that you cannot simply restructure the same installment agreement. If you want to make a different arrangement, you must file another Form 433-D and include any new information that might change your end-of-year payment amount or financial situation.
Does the IRS have a grace period to pay my installment agreement?
Yes, the Internal Revenue Service (IRS) has a 30-day grace period given under special circumstances. If you cannot make a payment due to economic hardship, the IRS may grant you a 30-day grace period.
Economic hardship is a loss of income, unexpected medical expenses, or other financial burdens that affect your ability to make timely payments. To get the 30-day grace period, you need to contact the Internal Revenue Service before the payment is due and explain your situation.
However, do not rely on having a grace period every time you need one, as the Internal Revenue Service (IRS) makes its determination at their discretion. The IRS does not usually offer a grace period for payment after your Form 433-D plan has been established. If you fail to make a payment, the IRS may use your tax refund to pay what you owe and begin civil action procedures against you.
In addition, the IRS may terminate your Form 433-D plan, leaving you with an option to pay your entire tax liability in one payment.
Does the IRS refuse a payment plan?
Yes, the Internal Revenue Service may refuse a payment plan or installment agreement.
Some of the reasons why the Internal Revenue Service may deny your proposal for a payment plan are:
- You owe a civil penalty for failure to file, negligence, or fraud.
- You owe other unresolved taxes and cannot qualify for an installment agreement.
- Your tax liability is beyond the maximum limit allowed by law.
- The Internal Revenue Service feels that you are unable to make timely payments.
- You provided incorrect or incomplete information on Form 433-D or Form 433-A.
Can I submit another Form 433-D after the IRS rejected my first payment plan proposal?
Yes, you can submit a new Form 433-D to the Internal Revenue Service (IRS) nine months after your payment plan proposal is rejected.
However, you may be ineligible if you had a previous installment agreement with the IRS and they revoked it because you failed to make payments or comply with any terms of Form 433-D.
The IRS automatically reevaluates your Form 433-D every 12 months once it has been approved. If anything has changed on your end that affects your ability to pay your federal taxes, you can submit another Form 433-D.
What if the IRS rejected my Form 433-D?
If the Internal Revenue Service rejected your Form 433-D and you think you are qualified, you may file a complaint with the Taxpayer Advocate Service.
The Taxpayer Advocate Service is an independent organization that represents you against the Internal Revenue Service if the IRS has been continuously mistreating or abusing you or have consistently been inefficient in resolving your case.
You may also contact a tax attorney to help file a petition for a second review of your Form 433-D and adjust any errors made when filing.
You can submit your request for a second review or appeal no sooner than 30 days after receiving a denial or rejection notice from the Internal Revenue Service.
Why did the IRS send me a Notice of Federal Tax Lien?
The Internal Revenue Service sends a Notice of Federal Tax Lien in any of the following situations:
- The IRS believes that you owe them money, and it is likely that you will not pay your tax liability.
- You did not file or pay your taxes on time after filing Form 433-D.
- Your account with the IRS is delinquent by $10,000 or more for three consecutive months.
Once the Internal Revenue Service (IRS) sends you a Notice of Federal Tax Lien, it will be easier for the IRS to levy your property and assets. If you do not file your delinquent taxes or negotiate payment arrangements with them, they may initiate civil action procedures against you.
What is a Notice of Federal Tax Lien?
A Notice of Federal Tax Lien is a document that the Internal Revenue Service (IRS) sends to inform other creditors that you owe back taxes, and they have permission to seize your property or assets if you do not pay what you owe.
You may receive a Notice of Federal Tax Lien if you entered an installment agreement with the Internal Revenue Service by filing Form 433-D but failed to make your scheduled payments.
Can Form 433-D be faxed?
Yes, you can fax Form 433-D to the Internal Revenue Service. You may contact the following to get the fax number of the Internal Revenue Service:
- For businesses, contact 1-800-829-0115
- For self-employed individuals or business owners, contact 1-800-829-8374
- For individuals who are wage earners, contact 1-800-829-0922
Can you have two installment agreements at a time?
No, you cannot have two installment agreements at a time with the Internal Revenue Service (IRS).
The IRS believes that if you cannot pay your tax liability under one payment plan, you probably do not have the ability to make timely payments on another proposal.
However, it is possible to be granted a second installment agreement if your first installment agreement has been satisfied.
How long does it take for the IRS to approve or reject Form 433-D?
It takes the Internal Revenue Service 30 days to review and approve or deny your Form 433-D.
If the Internal Revenue Service needs more time to review your materials, they will request an extension on their 30-day deadline.
If your proposal is denied, it can take up to 60 days for you to receive a notice from the IRS explaining why they rejected your payment plan proposal. You will then have 30 days from the date of that explanation to file an appeal with the Taxpayer Advocate Service or hire a tax attorney.
What is an installment agreement?
An installment agreement lets you pay your tax liability in monthly installments for up to 72 months or six years. Your payment options are determined based on your financial situation during the initial consultation with the Internal Revenue Service representative, who will also outline any associated fees and interest rates.
How does filing Form 433-D affect my credit score? Will it be reported to credit reporting agencies?
The Internal Revenue Service (IRS) does not report your installment agreement or Form 433-D to credit bureaus. Installment agreements are simply reported as being "currently not collectible" or "currently not paid" by the IRS.
However, if you filed Form 433-D and neglect to pay your tax liability, the Internal Revenue Service may report your account delinquent. They may file a Notice of Federal Tax Lien, which can affect your credit score.
How installment agreements affect your credit score will depend on your overall payment history with the Internal Revenue Service. If you have an installment agreement that is satisfied monthly, it will appear to creditors that you are able to responsibly make payments on time.