If you are a business owner—whether you run a Corporation, a Partnership, or a multi-member LLC—the IRS uses a specific financial magnifying glass to decide if they will settle your debt. That magnifying glass is Form 433-B (OIC).
Unlike individual taxpayers who use Form 433-A, businesses must disclose intricate details about operations, assets, and "personnel." In 2026, the IRS increased its focus on digital assets and dissipated business funds. Here is what you need to know to protect your company while seeking a settlement.
1. Who Must Use Form 433-B?
If your business is a separate legal entity from yourself, you must file 433-B. This includes:
- Corporations (C-Corps and S-Corps)
- Partnerships
- LLCs (unless you are a Single-Member LLC filing on Schedule C, in which case you typically use 433-A).
2. The "Business Assets" Deep Dive
The IRS isn't just looking at your bank balance; they want the Quick Sale Value (QSV) of everything that makes your business run.
Key Asset Categories on Form 433-B:
- Accounts Receivable: The IRS expects you to provide an aging report. They will typically include 75% to 100% of your "collectible" receivables in your offer amount.
- Intangible Assets: This is a 2026 focus area. The IRS now specifically asks for the value of domain names, trademarks, and even "goodwill" if the business were to be sold.
- Digital/Virtual Assets: You must disclose business-held Bitcoin, Ethereum, or other crypto-assets, valued at the Fair Market Value on the day of the offer.
3. The "Dissipated Assets" Trap for Businesses
One of the most common reasons business OICs are rejected in 2026 is the "Dissipated Asset" rule. If the IRS sees that the business had $50,000 in the bank a year ago but used it to pay for an owner's personal vacation or a non-essential luxury vehicle instead of taxes, they will add that $50,000 back to the offer amount as if the money still existed.
Pro Tip: Before filing, we review your business ledgers for the last 12–24 months to identify and "rehabilitate" any potential dissipated asset issues.
4. Income vs. "Allowable" Business Expenses
On Form 433-B, you must prove your monthly income and expenses. However, the IRS only allows "ordinary and necessary" expenses.
- Allowed: Payroll for employees, rent, utilities, materials, and necessary business insurance.
- Scrutinized: High "officer compensation," lavish meals/entertainment, and "consulting fees" paid to family members.
- 2026 Rule Change: Starting in 2026, the IRS has tightened the rules on employer-provided meals and "convenience" expenses. If your business is paying for perks that aren't strictly necessary for operation, the IRS will count that money as "disposable income" available to pay the tax debt.
5. The "Responsible Person" Factor
Section 2 of Form 433-B asks for a list of every partner, officer, or shareholder. The IRS uses this to see who might be personally liable for the Trust Fund Recovery Penalty (TFRP). If your business OIC is rejected, the IRS already has the roadmap of who to chase personally for the payroll tax portion of the debt.
Why Small Businesses Choose Wolf Tax
Filing a business OIC is high-stakes. If the IRS determines your business is "viable" enough to pay the full debt over time, they will reject your offer and may move to seize your equipment or levy your merchant accounts.
