Our business assets are fully depreciated. Can we show zero value on an IRS collection financial statement?

An asset's zero tax basis does not establish zero value on a collection financial statement. Form 433-B asks for specified business financial information, including asset values and liabilities under its instructions. Market value, available equity and accounting depreciation are different measures.

A specific business-owner situation

A company fully depreciated machinery that still has substantial resale value. Listing zero solely from the tax depreciation schedule can make its collection disclosure inaccurate.

Illustrative example, not a client result.

What to establish before filing

1. Identify each asset and current value.
2. Document secured liabilities and ownership.
3. Apply the form's requested valuation and financial categories.

Which fact changes the answer?

An asset with no tax basis can still have value, while secured debt may reduce equity. Both value and encumbrances need evidence.

A mistake to avoid

Do not copy adjusted tax basis into every current-value field.

Records that support the decision

• Asset list.
• Valuation support.
• Loan balances and lien documents.

The decision to document

Have a resolution specialist reconcile the financial disclosure to actual assets and debts, with clearly labeled estimates and supporting dates.

Tax collection disputes and debt settlement require a tax-resolution specialist. AE focuses on proactive planning, tax preparation, amendments and real estate tax strategy.

Business-owner tax planning and preparation scope · Discuss advisory scope with AE

Related questions

• Our business wants to dispute an IRS collection notice. Is calling the revenue officer enough to request a hearing?
• The IRS returned our business offer in compromise. Do we have the same appeal rights as a rejection?

Sources and editorial context

• IRS Publication 594: collection process and rights
• IRS Form 433-B: business collection financial statement

General educational information prepared with AI assistance. No individual professional review is claimed. Apply the relevant tax-year rules to the actual records. Editorial policy · AI disclosure.