According to the Internal Revenue Manual, the first taxpayer interview is the most important in the IRS efforts to collect. The revenue officer is trained to get information from you. Obviously, each revenue officer has his or her own style. Most of them will start of being friendly. Again, their goal is to get financial information from you so that ultimately they can use it against you to collect from you.
As I’ve said in other blogs and other papers, the first meeting can be in person or over the phone but I would strongly recommend you treat them with respect. To a certain extent, your fate is in their hands. Without a doubt, their primary purpose of the interview is to gather information on the IRS form known as a Collection Information Statement, and as the name implies, it is information used to collect from you.
Here are three forms used by the IRS primarily: The 433A, which is for individuals, the 433B which is for businesses, and the 433F which is a shorter version of the 433A.
Here is THE form for the IRS. In most cases, the IRS will not even negotiate with you until this form has been completed. From the perspective of a revenue officer, he simply cannot do his job until this form is complete so he is very motivated to get all of the answers he needs. Simply stated, this form is a personal financial statement (a 433A that is). The 433A is not perfect. Keep in mind, it is the same form used over and over by the IRS all across the country with every taxpayer (on an individual basis) regardless of your occupation, age or where you live. But essentially the form seeks information about your assets and liabilities on one hand, and your income and expenses on the other. Again, keep in mind all of this is designed to help them collect from you.
An important point: At the end of the meeting after the form has been filled out, the revenue officer will ask you to sign the forms. I would strongly recommend that you ask them for time to review the forms at home before you sign them. Many of the items they ask you, you will know. For example, you may know your exact car payment but there are other living expenses that you may be guessing at. If your guesses or estimates are wrong you may be hurting yourself because you may have higher expenses than what you’ve told the revenue officer and once you’ve signed the form, they will treat those expenses as your actual expenses. Also, keep in mind that at the conclusion of this form, the IRS officer will have a number that is what you have “left over” every month after paying your bills and he will demand at least that amount in a monthly payment. Will you be able to make that payment? Request that you be able to take the form home and go over it with your records or with your tax advisor.
If you’ve already signed the form, it’s still not too late. You may be able to revise it. However, keep in mind the IRS will want documents to support your claims for expenses.