IRS Publication 1854 – IRS Forms, Instructions, Pubs 2026 – If you owe back taxes and the IRS is reviewing your ability to pay, you will likely need to submit Form 433-A, the Collection Information Statement for Wage Earners and Self-Employed Individuals. IRS Publication 1854 (Rev. April 2025) is the official, step-by-step guide that explains exactly how to complete this critical form.
This article walks you through everything in Publication 1854 using the latest April 2025 revision, so you can prepare an accurate, complete Form 433-A that helps you qualify for an installment agreement, offer in compromise, or other collection relief.
What Is Form 433-A and Why Does Publication 1854 Matter?
Form 433-A is the IRS’s primary tool for collecting detailed financial information from individuals (wage earners and self-employed taxpayers) to determine how much you can realistically pay toward your tax debt. The IRS uses it to calculate allowable living expenses, asset equity, and disposable income.
Publication 1854 is the IRS’s dedicated instruction booklet that:
- Explains every line of Form 433-A
- Provides current national and local expense standards (updated April 21, 2025)
- Clarifies what counts as “necessary” expenses
- Highlights modern assets such as digital currency, PayPal, and online accounts
Download the latest versions directly from the IRS:
- Publication 1854 (Rev. 4-2025) → https://www.irs.gov/pub/irs-pdf/p1854.pdf (the link you provided)
- Form 433-A (Rev. 7-2022) → https://www.irs.gov/pub/irs-pdf/f433a.pdf
Who Must Complete Form 433-A?
You generally need Form 433-A if you are an individual who owes:
- Personal income tax (Form 1040)
- Trust Fund Recovery Penalty (as a responsible person)
- Partnership tax liability for which you are personally responsible
- Tax debt from a disregarded single-member LLC
- Self-employment tax or have self-employment income
Joint liabilities → Both spouses must sign.
When Is Form 433-A Required?
The IRS typically requests it when you:
- Apply for a long-term installment agreement
- Request an offer in compromise
- Seek Currently Not Collectible (CNC) status
- Are in a collection case worked by a Revenue Officer
Step-by-Step Guide to Completing Form 433-A (Based on Publication 1854)
General Rules
- Answer every question or write “N/A”
- Use attachments for extra space
- All amounts in U.S. dollars
- Sign under penalties of perjury
- Expect the IRS to request verification (pay stubs, bank statements, etc.)
Section 1: Personal Information
Provide full name, address, SSN, date of birth, marital status, dependents, and any outside business interests (LLCs, partnerships, etc.).
Section 2: Employment Information (Wage Earners Only)
List current employer(s) for you and your spouse: name, address, phone, occupation, pay period, and length of employment.
Section 3: Other Financial Information
Disclose lawsuits, bankruptcies, foreign residence, trusts, safe deposit boxes, and any assets transferred for less than full value in the past 10 years.
Section 4: Personal Asset Information (Foreign & Domestic)
This is the balance-sheet section. List everything:
- Cash on hand (Item 12)
- Bank accounts (Item 13) → Include checking, savings, PayPal, Venmo, payroll cards, government benefit cards — even zero-balance accounts
- Investments (Item 14) → Stocks, bonds, mutual funds, digital assets (Bitcoin, Ethereum, etc.), business interests
- Available credit (Item 15) → Credit cards and lines of credit (not required to borrow, but must be disclosed)
- Life insurance with cash value
- Real estate (Item 17) → All properties, lender details, fair market value, loan balance, equity
- Vehicles (Item 18) → Cars, boats, RVs, motorcycles — owned or leased
- Other personal assets (Item 19) → Jewelry, art, collections, domain names, patents, copyrights, etc.
Key tip from Pub 1854: Use current fair market value (what you could sell it for today), not purchase price.
Section 5: Monthly Income and Expenses
Complete Sections 6–7 first if self-employed.
Income (gross monthly)
- Wages (do not subtract withholdings — list them as expenses)
- Net business income (from Section 7)
- Pensions, Social Security, rentals, alimony, child support, etc.
Necessary Living Expenses (use current standards effective April 21, 2025)
| Category | Standard (examples) | Notes |
|---|---|---|
| Food, Clothing & Miscellaneous | 1 person: $839 2 persons: $1,481 4 persons: $2,129 + $394 per additional person |
National standard; substantiate higher amounts |
| Out-of-Pocket Health Care | Under 65: $84/person 65+: $149/person |
National standard |
| Housing & Utilities | Local standard by county | Mortgage/rent + taxes, insurance, utilities |
| Vehicle Ownership & Operating | Ownership: actual loan/lease payment Operating: local standard |
One vehicle per person usually allowed |
Other allowable expenses (with documentation):
- Health insurance
- Court-ordered payments
- Current-year taxes
- Secured debts (beyond mortgage/car)
- Certain student loans or other debts if necessary for health/welfare or income production
Net difference (income minus allowable expenses) determines your monthly ability to pay.
Sections 6 & 7: Self-Employed / Sole Proprietorship Only
Section 6 → Business details, payment processors (including crypto exchanges), business bank accounts, accounts receivable, business assets.
Section 7 → Detailed business profit-and-loss for the last 3–12 months. Must reconcile with your Schedule C or books. Net income flows to Section 5, line 23 (losses are entered as zero for collection purposes).
Required Supporting Documents (What the IRS Usually Requests)
- Last 3–6 months bank statements
- Pay stubs or profit/loss statements
- Tax returns (last 1–2 years)
- Mortgage/rent statements, vehicle loan documents
- Retirement/401(k) statements
- Life insurance policies with cash value
- Proof of expenses exceeding standards
Important Tips from Publication 1854
- Household income → If you share expenses or live in a community-property state, include both spouses’ full income and expenses.
- Digital assets → Explicitly listed — do not omit crypto wallets or NFT holdings.
- Expenses above standards → Allowed if you provide verification that they are necessary.
- Credit card advances → The IRS notes this as an option to pay taxes, but you are not required to borrow.
- Accuracy → The form is signed under penalties of perjury. Omissions or understatements can delay relief or lead to rejection.
What Happens After You Submit Form 433-A?
The IRS reviews your financials, calculates allowable expenses using national and local standards, and determines your “ability to pay.” This leads to:
- Installment agreement amount
- Offer in compromise acceptance/rejection
- Currently Not Collectible status (if you truly cannot pay)
Related IRS Resources
- Publication 594 → The IRS Collection Process
- Publication 5059 → How to Prepare Form 433-B (businesses)
- Collection Financial Standards (monthly updates) → irs.gov/businesses/small-businesses-self-employed/collection-financial-standards
- Form 433-F (simplified version for some cases)
Bottom line: Publication 1854 (April 2025) is the IRS’s own roadmap for Form 433-A. Following it carefully, using the updated expense standards, and attaching thorough documentation gives you the best chance of a favorable collection outcome.
Download the PDF you linked, print the form, and work through it section by section using this guide. When in doubt, the IRS instructions are the authoritative source.
Need help? Contact the IRS collection office that sent your notice, or consult a tax professional or Low Income Taxpayer Clinic.
Accurate as of February 2026 — always verify the latest revision dates on IRS.gov.