In preparing a request for an appeal, compile a list of specific items you do not agree with and a statement explaining why you disagree with each item. You may find a review of the following beneficial:
- The Asset/Equity (AET) and Income/Expense (EIT) Tables that accompianed the OIC denial letter;
- Your Form 433-A, Collection Information Statement for Wage Earners and Self-Employed Individuals;
- the supporting documentation submitted with the Form 433-A; and
- Publication 1854: How to Prepare a Collection Information Statement.
Check your figures and calculations again and verify the documents you submitted to Collection. If you do not have your completed Form 433-A available, refer to a blank Form 433-A.
- The Monthly Income/Expense Statement (see Section 4, Page 4) requires you to provide the following:
- Proof (i.e. pay stubs and earnings statements) of gross earnings and deductions for the past three months from each of your employers;
- Proof of pension, social security and/or other income for the past three months;
- A current statement from the lender on your automobile with the monthly payment and balance due;
- A current statement from the lien holder on your residence with the monthly payment and balance due;
- A copy of your last Form 1040 with all schedules, and
- Proof of current expenses paid for the past three months including utilities, rent, insurance, property tax, non-business transportation expense (i.e. car payments, lease payments, fiel, oil, insurance, registration, parking), healthcare (including insurance premiums co-payments, other out-of-pocket expenses) and court-ordered payments.
Note: The amounts used on the “Monthly Income/Expense Statement” of Form 433-A could be different than the amounts used on the IET worksheet for food, clothing, miscellaneous, transportation, housing and utilities, out-of-pocket healthcare and other expenses. Collection Financial Standards are used to help determine a taxpayer’s ability to pay a tax debt. All standards, except miscellaneous, are derived from the Bureau of Labor Statistics (BLS) Consumer Expenditure Survey (CES). These financial standards are explained below:
- National standard expense allowed for food, clothing and miscellaneous monthly expense. The standard amount is computed based upon your income and family size instead of actual expenses.
- National standard expense allowed for out-of-pocket healthcare expenses including medical services, prescription drugs, medical supplies (i.e. eyeglasses, contact lenses, etc.). This amount is based on Medical Expense Expenditure Panel Survey data and is in addition to the amount paid for health insurance.
- Housing and utilities expense allowed for housing and utilities monthly expense. The standard amount is computed based upon the state and county where you reside and your family size.
- Transportation expense allowed for monthly transportation expenses. The standard amount is computed by combining the standard for ownership cost and operating cost. This is based on the number of vehicles you own and the region you live.
- Did you compute the amounts in accordance with instructions?
Review the instructions in the following sections on Form 433-A:
- Section 4, Items 11-13: Cash on Hand, Personal Bank Accounts and Investments
- Section 4, Items 14-15: Available Credit and Life Insurance
- Section 4, Items 17-19: Personal Asset and Liability
- Section 5: Self-Employed
Note: Certain assets such as vehicles, and real estate should be valued at the quick sale value. This is the amount you can sell the asset today. You may compute the value of a vehicle by consulting a trade association guide for the fair market value (FMV) and discounting the value by 20%. You may compute the value of real estate by an appraisal, the replacement cost value on your residence and possibly the taxable value of your home.
- Did you provide the required attachments?
See the bottom of page 4 of Form 433-A for “Attachments Required for Wage Earners and Serf-Employed Individuals.”