Introduction: Why Form 433-A Matters for Americans Living in Britain
Form 433-A is the eight-page financial statement the IRS uses to decide how much a wage earner or self-employed individual can pay towards a US tax debt, and for an American living in London it is the most consequential document in any collection case. It lists every account, investment, property and pension you hold anywhere in the world, sets out your monthly income and spending in US dollars, and ends with a signature under penalties of perjury. Consequently, whatever you write on it becomes the basis for a payment plan, an offer in compromise or a decision that your account is uncollectable.
Most of what has been written about the form assumes the taxpayer lives in Ohio, banks with a US bank and owns a US house. Our clients do not. They are investment bankers with deferred bonuses, founders who own UK companies, and dual nationals with a Surrey home, a self-invested personal pension and a stocks and shares ISA. For them, the hard questions are different. How should a pension that cannot be touched until 55 be valued? Which expense standards apply when the IRS county tables stop at the US border? And what happens when the accounts listed on the form do not match the FBARs filed in earlier years?
This guide answers those questions using the current June 2026 revision of the form, the Internal Revenue Manual, and our own experience of preparing collection statements for clients across the UK. At TaxYork, we treat the statement as part of comprehensive US tax return preparation and compliance, not as a standalone form.
What Form 433-A Asks You to Disclose
The current IRS Form 433-A, Rev. 6-2026 has seven sections. Wage earners complete Sections 1 to 5, while self-employed individuals also complete Sections 6 and 7, which cover the business and its profit and loss. Section 1 asks for personal details, Section 2 for employment, and Section 3 for other financial information, including lawsuits, bankruptcies and transfers. Section 4 covers personal assets, and its heading states plainly that it applies to assets that are foreign and domestic. Finally, Section 5 is the monthly income and expense statement, with every figure reported in US dollars.
Notably, several questions are aimed squarely at people like our clients. Line 8b asks whether you have lived outside the US for six months or longer in the past ten years, and asks for the dates. Line 8c asks whether you hold dual citizenship and with which country. Line 11 asks whether you have transferred any asset worth more than $10,000 for less than its full value in the past ten years. Moreover, the bank account, investment, property and vehicle lines all ask for the country as well as the address.
Who Prepares Form 433-A and When
The IRS explains the form in Publication 1854, How to Prepare a Collection Information Statement. In practice, you meet the form in four situations. A revenue officer assigned to a larger balance will ask for it. An installment agreement that falls outside the simplified online routes will need it. A request to place your account in currently-not-collectible status depends on it. And an offer in compromise requires the closely related Form 433-A (OIC), which is filed with Form 656.
By contrast, individuals who owe $50,000 or less in combined tax, penalties and interest can usually set up a long-term plan through the IRS payment plans and installment agreements page without any financial statement at all. Between that level and larger balances, the IRS often accepts the shorter Form 433-F. Under Internal Revenue Manual 5.15.1, Financial Analysis Handbook, Form 433-F may be used for individuals who owe only individual income tax liabilities with aggregate assessments under $250,000, but it cannot be used for offers in compromise. Therefore, for high-net-worth Americans abroad with larger debts, business interests or an offer in view, the full Form 433-A is the document that matters.
How the IRS Treats Taxpayers Who Live Outside the United States
The single biggest gap in published guidance is how the IRS sets living expenses for someone who does not live in a US county. For domestic taxpayers, the IRS publishes Collection Financial Standards for food and clothing, out-of-pocket health care, housing and utilities by county, and vehicle costs by region. The latest tables took effect on 29 June 2026. However, none of those tables contain a figure for Kensington, Edinburgh or Bristol.
The International Collection Financial Standards
The Internal Revenue Manual fills that gap. IRM 5.15.1.8(3) states that taxpayers residing outside the United States are measured against International Collection Financial Standards, and it instructs IRS employees to use an internal International Collection Financial Standards Calculator as the baseline. Importantly, it also tells them not to use other sources or arbitrarily pick a US location as the starting point. The calculator itself is not published, so you cannot look up the allowance in advance. As a result, the quality of your evidence carries more weight than it would for a domestic taxpayer.
In practice, that means the London figures on your Form 433-A need to be backed by documents that a US-based employee can read without context. A tenancy agreement or mortgage statement supports housing. Council tax bills, energy statements and broadband contracts support utilities. A rail season ticket supports public transport. Equally, a short covering note that explains what each UK charge is, and converts it into dollars at a stated rate, prevents the most common query we see, which is simply an employee not recognising a British expense.
Expenses the IRS Normally Refuses
Footnote 6 on Form 433-A lists expenses the IRS does not generally allow. These include private school tuition, college costs, charitable donations, voluntary retirement contributions and payments on unsecured debts. Nevertheless, the IRS may allow them if they are necessary for health and welfare or the production of income. For British families, private school fees are the expense most likely to be challenged, and pension contributions made through salary sacrifice need careful explanation, because they reduce the gross pay figure rather than appearing as an expense.
There is, however, a significant exception. Under the six-year rule described in IRM 5.15.1.11, if the entire liability, including accruing penalties and interest, can be paid within six years and within the collection statute, all reasonable expenses may be allowed, and the taxpayer need not substantiate each one. For a well-paid household, this rule often decides whether school fees stay in the budget.
UK Income Tax and National Insurance as Current Taxes
Line 46 of Form 433-A asks for current year taxes, and footnote 13 refers to federal and state taxes withheld or paid as estimated tax. The form is silent on foreign tax. In our experience, the right approach is to list UK income tax and National Insurance deducted through PAYE on Line 46, attach payslips, and explain in a note that these are compulsory taxes on the same income. Because the UK income tax rates reach 45% on income above £125,140, and the personal allowance disappears at that level, a London professional may pay 40% or more of gross salary in UK tax and contributions. If that figure is missing, the statement overstates disposable income dramatically.
Valuing UK Assets on Form 433-A
Section 4 of Form 433-A is where Americans in Britain most often go wrong, because UK products do not fit neatly into the US categories on the form. The guiding principle in the Internal Revenue Manual is equity: what the IRS could realistically obtain from an asset after loans, sale costs and any tax or penalty triggered by turning it into cash.
Quick Sale Value and the 80% Rule
For property and other illiquid assets, the IRS usually works from quick sale value rather than full market value. IRM 5.15.1.21 describes quick sale value as the price obtainable under financial pressure, usually within 90 days, and states that it is generally 80% of fair market value. Consequently, a UK home worth £1,000,000 with a £450,000 mortgage does not show £550,000 of equity in IRS terms. Instead, the calculation is £800,000 less £450,000, which leaves £350,000.
On top of that, UK-specific costs deserve to be shown. A fixed-rate mortgage may carry an early repayment charge of several per cent. Sale costs include agency fees and conveyancing. If the house is jointly owned with a British spouse who does not owe the US tax, only your share is your equity, and Line 18 asks you to name every title holder and how title is held. Furthermore, a large gain on a UK home can be free of UK tax under private residence relief yet still taxable in the US above the section 121 exclusion, so the US tax on a forced sale is a genuine liquidation cost.
UK Pensions, SIPPs and Workplace Schemes
Line 14 of Form 433-A asks for investments, and the form mentions US retirement plans such as 401(k)s by name. UK pensions belong on the same line. IRM 5.15.1.28 explains that retirement funds are assets, but that their equity depends on access. Where a plan restricts withdrawals, equity is the loan value if borrowing is allowed, and otherwise the plan may have no available equity until the restriction ends.
That logic matters for UK schemes. According to GOV.UK guidance on personal pensions, most private pensions cannot normally be drawn before age 55, rising to 57 from April 2028, and UK pensions cannot be borrowed against. Therefore, a 49-year-old with £320,000 in a self-invested personal pension should list the pension in full, with its provider, value and date, while explaining in the equity column that nothing is available today. By contrast, a client over 55 with a flexible drawdown pot has real equity, reduced by the UK tax on withdrawal above the 25% tax-free element and any US tax that the treaty does not shield. Listing the pension at full value as available equity is a mistake we see often, and it can make an offer in compromise look impossible on paper.
ISAs, Premium Bonds and UK Brokerage Accounts
Individual Savings Accounts are tax-free in the UK but receive no special treatment from the IRS. A cash ISA belongs with bank accounts on Line 13, and a stocks and shares ISA belongs with investments on Line 14. Because an ISA can be withdrawn at any time, the IRS treats it as fully available, less any US tax that a sale would trigger. NS&I Premium Bonds are also accessible within days and should be listed. Similarly, UK brokerage accounts holding funds, gilts or shares go on Line 14, and any UK-domiciled funds may carry PFIC consequences on sale that reduce the real equity.
UK Company Shares and Deferred Bonuses
The investments line also asks for every corporation, partnership or limited liability company in which you are an officer, director, owner or member. For a founder, that means the UK limited company, including its approximate value and any director's loan balance. If you are self-employed or the company is effectively your business, Sections 6 and 7 must be completed as well. Unvested share awards and deferred bonuses are harder, because they are not yet yours. Even so, we list them with vesting dates in an attachment, because a revenue officer who later discovers a vest that was not mentioned will doubt the rest of the statement.
Currency, Dates and the Dollar Figures
Section 5 of Form 433-A states that every amount must be reported in US dollars, and the asset lines ask for values as of a specific date. However, the form does not say which exchange rate to use. In our practice, we pick one rate and one date for the whole statement, state both in a covering note, and keep evidence of the source. The Treasury Reporting Rates of Exchange published by the Bureau of the Fiscal Service are a defensible choice, as is a published spot rate on the valuation date. Mixing rates across lines is what creates arithmetical gaps that an IRS reviewer will question.
Monthly figures need the same care. The form explains that weekly pay is multiplied by 4.3 and fortnightly pay by 2.17. UK salaries are usually monthly, but bonuses are not. Therefore, an annual bonus should be spread over twelve months and explained, rather than left out or shown as a single month's income, because the IRS will see it on your US return anyway.
The FBAR Reconciliation Trap
Here is the point that most guides miss entirely. Form 433-A is signed under penalties of perjury, and IRM 5.15.1.20 notes that IRS employees may use FATCA data to verify a taxpayer's ability to pay. UK banks report US account holders to HMRC, which passes the data to the IRS. Consequently, every account you list on the statement can be compared with the FBARs you filed with FinCEN and the Form 8938 attached to your returns.
If the statement shows a Premium Bonds holding, an old savings account or a pension that never appeared on an FBAR, you have created a written admission of a missed FBAR at the moment the IRS is focused on collecting from you. On the other hand, leaving the account off the form is far worse. Concealing property in connection with a collection matter is a separate offence under section 7206(4) of the Internal Revenue Code, and for an offer in compromise, section 7206(5) applies.
The answer is sequencing. Before the statement is signed, we reconcile every account against FinCEN's FBAR filing requirements and the IRS comparison of Form 8938 and FBAR requirements. Where earlier years are incomplete, we correct them first through the appropriate disclosure route, with our FBAR and FATCA compliance service handling the late filings. Many clients are surprised that closed accounts matter too, and our guide to reporting closed foreign accounts on an FBAR explains why. Only then does the collection statement go to the IRS.
What the IRS Can and Cannot Do With UK Assets
It is natural to ask why Form 433-A demands a full picture of assets the IRS may struggle to reach. The answer is that the statement drives the outcome regardless of where the assets sit. An IRS levy under section 6331 cannot be served on a UK bank in the way it can on a US one, and the US-UK income tax treaty does not contain a general article obliging HMRC to collect US income tax on the IRS's behalf. Nevertheless, IRM 5.15.1.20 tells employees to consider whether a taxpayer can liquidate or borrow against a foreign asset, and whether it was acquired to put money beyond IRS reach.
The IRS also has tools that do not depend on UK co-operation. It can levy US bank accounts, US brokerage accounts and US-source payments, and it can offset future refunds. Moreover, if a debt exceeds the inflation-adjusted threshold, which the IRS passport page shows as $66,000 for 2026, and a lien or levy has been issued, the IRS can certify the debt to the State Department, which may refuse to renew a US passport. For a dual national who travels to New York for work, that is often the real pressure. If you have already received a final notice, our guides to the LT16 collection notice and to requesting a collection due process hearing from Britain explain the deadlines that run alongside the statement.
Worked Example: A Surrey Household With a $212,000 IRS Balance
The following case is illustrative, with figures rounded and converted at $1.33 to the pound.
The Facts
Daniel is a 49-year-old dual national US UK citizen working as a managing director at a London bank on a salary of £180,000. His British wife, Emma, earns £60,000 and does not owe any US tax. After a decade of missed US tax returns, Daniel filed catch-up returns that reported PFIC charges on UK funds which foreign tax credits could not offset, plus late-filing penalties and interest. His assessed balance reached $212,000, and a revenue officer requested a Form 433-A within 30 days.
His assets were a jointly owned home worth £1,100,000 with a £500,000 mortgage, a SIPP worth £320,000, a stocks and shares ISA worth £45,000, and £30,000 of Premium Bonds that, as it turned out, had never appeared on his FBARs.
Building the Income and Expense Statement
On Daniel's Form 433-A, his gross salary is £15,000 a month, or $19,950. His UK income tax and National Insurance come to about £72,800 a year, or roughly $8,070 a month, which we placed on Line 46 with payslips attached. Because Daniel earns 75% of household income, we allocated 75% of shared costs to him. On that basis, housing and utilities of $5,320 became $3,990, food, clothing and miscellaneous of $1,995 became $1,496, transport became $848 and private medical cover became $250.
Those allowable expenses total $14,654, leaving net monthly income of $5,296. Private school fees of $3,192 a month, or $2,394 on Daniel's share, sat outside the standard allowances.
The Asset Analysis
At 80% quick sale value, the home is worth £880,000, and after the £500,000 mortgage, the remaining equity is £380,000. Daniel's half is £190,000, or about $252,700, before a 3% early repayment charge. The SIPP was listed at £320,000 with nil available equity, because Daniel cannot access it until 55 and cannot borrow against it. The ISA and Premium Bonds, worth about $99,750 together, were treated as fully available.
The Outcome
Before the statement was signed, we filed the missing FBARs for the Premium Bonds with a reasonable-cause explanation, so the disclosure on the form matched the FinCEN record. Daniel then paid $59,850 from the ISA, which brought the balance down to about $152,150. Because the remaining debt and future interest could be paid within six years, the six-year rule applied, and the revenue officer allowed the school fees. That reduced the monthly payment to about $2,900. Over 72 months, those payments total roughly $208,800, which comfortably covers the balance plus interest at the IRS quarterly underpayment rate.
The family home was not sold or remortgaged, because the plan paid the debt in full within the collection statute and Emma co-owned the property. Had Daniel listed the SIPP as £320,000 of available equity, or left the Premium Bonds off the form, the result would have looked very different.
A Seven-Stage Preparation Sequence for Form 433-A
We prepare every Form 433-A in the same order, and the sequence itself is the main protection against error.
First, we confirm the exact balance, penalties and assessment dates for every year, because a debt that includes a substitute for return assessment or a removable penalty should be corrected before you agree to pay it. Second, we reconcile every account and pension against filed FBARs and Forms 8938, and fix gaps before anything is signed. Third, we fix one exchange rate and one valuation date, and record the source.
Fourth, we gather UK evidence that a US reviewer can follow, including payslips, P60s, mortgage statements, council tax bills, pension statements and ISA valuations, and we annotate anything unfamiliar. Fifth, we calculate equity on each asset using quick sale value, joint ownership shares, early repayment charges and any US or UK tax triggered on sale. Sixth, we prepare the monthly budget, apportioning shared household costs where a spouse is not liable, and decide whether the six-year rule is achievable.
Finally, we test the proposed outcome. If the numbers support an installment agreement, we propose a payment that the household can sustain. If they point to an offer, we prepare Form 433-A (OIC) and Form 656, using the IRS offer in compromise pre-qualifier and guidance. If they show no disposable income at all, we request currently-not-collectible status with full supporting evidence.
Common Form 433-A Mistakes Made by Americans Abroad
The errors we correct most often are predictable. Clients leave off pensions because they think of them as untouchable, when the form requires them to be listed. They report UK salary net of tax, which hides the tax that should sit on Line 46. They convert pounds at different rates on different pages. They omit a UK company because it is small, or a spouse's sole-name account without explaining why it is not theirs. They also answer No to Line 8b despite living in London for years, which undermines credibility immediately.
Above all, they sign the statement before checking it against their FBAR history. Because every Form 433-A is a sworn statement that can be compared with FATCA data, the cost of an omission is far higher than the inconvenience of a full disclosure.
How TaxYork Can Help
TaxYork prepares Form 433-A and Form 433-A (OIC) for Americans in Britain as part of comprehensive US tax return preparation and compliance. We start with the underlying years, using our US tax returns for expats service to correct missed US tax returns and our IRS Streamlined filing service where non-wilful catch-up is the right route. We reconcile missed FBAR and Form 8938 history, value UK pensions, ISAs and property on the basis the IRS applies, and present your UK expenses in a form that a US reviewer understands. Where your affairs span both countries, our cross-border planning team aligns the collection plan with your UK tax position, so that settling one does not create a problem with the other.
Conclusion: Treat Form 433-A as a Sworn Financial Portrait
Form 433-A is far more than an administrative questionnaire. For an American with UK assets, it is a sworn portrait of your finances in both countries, measured against standards you cannot see and cross-checked against data the IRS already holds. Prepared carefully, it can protect a family home, keep school fees in the budget and turn a frightening balance into a manageable plan. Prepared hastily, it can expose a missed FBAR, overstate your ability to pay and close off the very options you were hoping to use. The difference lies in sequencing, evidence and an accurate understanding of how the IRS values UK assets.
Contact Us
If a revenue officer has asked for a Form 433-A, or you expect to need one, book a consultation before you sign anything. Email hello@taxyork.com or call 020 3488 8606 to speak with our US-UK tax specialists.
Disclaimer
This article provides general information about US federal tax collection procedures and the IRS collection information statement as understood in November 2026, and does not constitute legal or tax advice for your specific circumstances. The worked example is illustrative, and its figures and outcomes are not a prediction of any result. Tax rules, exchange rates and IRS practice change, so you should obtain professional guidance on your own facts before acting.