IRS Form 433 D, also known as the Installment Agreement is a legal document that is used to facilitate compliance with the IRS code. The primary aim of this document is to seal a legally binding agreement between the IRS and the taxpayer to settle your federal tax debts, fines and liabilities in an all cash settlement. It is essentially designed to save taxpayers from jail, garnishments, criminal charges and more. The most important feature of IRS Form 433-D and any other IRS form for that matter is that it requires taxpayers to pay their taxes in full, at least in the beginning. When a taxpayer is unable or unwilling to pay the full amount on the given date, he or she should be notified accordingly. Not doing so will result to an additional fine on the overdue amount, and eventually, prosecution. The IRS has the right to take legal action and has all the powers to levy any uncooperative taxpayers. With that being said, it is the duty of every taxpayer to comply with his or her duties to the IRS in order to avoid any legal repercussions.

A taxpayer may not opt for the Installment Agreement if his or her financial circumstances change drastically and he or she would not be able to pay the full amount owed. The IRS understands that many taxpayers find it difficult to pay back their taxes for various reasons. They may have been laid off, had their hours cut down or they may have experienced some sort of emergency and couldn’t pay all their bills. Some taxpayers also face mounting medical expenses and cannot pay their taxes for some time. In addition, some taxpayers get married or start families, which means they have less income to provide. Whatever the reason, it is important to understand that with the Installment Agreement, you are giving up options if you fail to pay your taxes on time.

The IRS Form 433 D enables the taxpayer to include his or her social security number so that the agency can contact him or her in case of a problem. For instance, if a taxpayer fails to report an income because of a disability or he or she didn’t list a social security number when filing for a social security number, the IRS can contact the person. Through this option, the taxpayer can choose how many times the IRS can contact him or her before sending out collections letters. In addition, if a taxpayer has a financial problem, he or she might be unable to pay all the back taxes and the IRS can start sending collection letters at the taxpayers’ social security number. In this case, the social security number is the only identifying information the agency needs to send the collections letters.

The Purpose of Irs Form 433-D

With the help of Installment Agreements, the IRS can collect unpaid taxes by attaching a lien on the delinquent amount and can collect monthly until the debt is satisfied. However, this doesn’t mean that the taxpayers have to pay the entire amount in one lump sum. You are responsible for paying your share until the entire debt is satisfied. If the total is not collected, the Installment Agreement can be re-activated and collection letters sent to the homeowners again. The IRS has explained that the Installment Agreement is a better choice than a judgment debtor because it provides flexibility in dealing with back taxes. Although there are some differences between this agreement and the IRS Power of Attorney form, the basic structure remains the same. Because the IRS is able to take the full ownership of any property used as security for the Installment Agreement, most borrowers are confident that the deal they are entering into will not go against their Social Security.

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