Houston Tax Attorney
Do you owe the IRS back taxes for filed tax returns? Has the IRS threatened to garnish your wages (yes, they can do this, even in Texas) or to put a lien on your home? The IRS can be aggressive in collecting past due taxes, and the longer you wait the higher the amount will become as they add penalties and interest.
Why call a faceless out-of-state company that takes a one-size-fits-all approach? Instead of talking to a salesperson, call a Houston tax attorney at Dove Law Firm, PLLC and meet with a Texas-licensed lawyer who will take a customized approach to solving your tax debt. An “offer in compromise” is not always realistic or the best option. A Houston tax attorney can tell you what options you may have after learning about the facts of your situation. Call a Houston tax attorney at Dove Law Firm, PLLC who will analyze your situation and develop an individualized plan to address your IRS tax debt situation.
Whether you owe IRS tax debt for your personal tax return or for business tax returns (including 941 payroll taxes), call us. We can help! Do not ignore your back taxes, call a Houston tax attorney today for advice on tax relief.
What we do: Develop an individualized plan to handle your IRS tax debt
We start by learning the facts of your case and analyzing the taxes you owe in order to put together your personalized plan to achieve a tax resolution. There can be no one-size-fits-all solution because everyone’s facts are different. How much you owe the IRS in back taxes, for what year(s) are your IRS taxes owed, your income and expenses and your assets are a few of the things we’ll need to learn about you to analyze your situation and develop a personalized plan to help you deal with the IRS tax debt and get tax relief. Based on what we learn about you, we will discuss what options you may have to pay or settle your IRS tax debt and discuss the pros and cons of each option.
- Analyze if the taxpayer has a statute of limitations that has run for taxpayer’s IRS back taxes
- Analyze if an offer in compromise may resolve the taxpayer’s IRS back taxes
- Analyze if a payment plan with the IRS may be the right tax relief for the taxpayer
- Analyze if the IRS may determine the taxpayer should be put in collectable status
- Analyze if the back IRS tax debt may be dischargeable in a Bankruptcy
- Analyze Statute of Limitations
There is a time limit for the IRS to assess or collect back taxes. Once that time limit expires, the IRS can no longer take collection actions. A Houston tax attorney can analyze your tax information to determine if any of the tax years for which you owe are at or near the statute of limitations. Generally speaking, the IRS has 10 years from the date a tax is assessed to collect on the back taxes (there are certain occurrences which can extend the 10-year deadline).
-Offer In Compromise (“OIC”)
This is a very formal process subject to the IRS’s rules and is not as easy as calling the IRS and saying “let’s make a deal.” A Houston tax attorney will analyze your IRS tax debt situation to determine if it makes sense to prepare an offer in compromise for your tax debt. An OIC is an agreement where the IRS will accept an amount less than what you owe as settlement for your back taxes.
The IRS requires that you submit a non-refundable payment equal to 20% of the total offer along with the application. An OIC should only be submitted after careful calculation and considerations.
When is the IRS likely to agree to an Offer In Compromise?
The two main reasons the IRS will agree to an OIC are if there is doubt as to collectability (you do not have enough income or assets to pay the tax debt in full) or that collection of the full tax would create an economic hardship, would be unfair or would be inequitable. The IRS even has an online tool to help determine if you may qualify for an OIC to settle your back tax debt. There is a mathematical calculation that must be performed that involves the net value of your assets and your net monthly income.
What is involved in filing an Offer In Compromise with the IRS?
There is an application fee to the IRS that must be paid along with several forms that must be completed. These forms include a full disclosure of your income, expenses and assets. The IRS can request paystubs, bank statements and other documents. Once you have gathered the information, a Houston tax attorney will perform the calculations needed to determine if an OIC is right to resolve your back tax debt.
What is the downside to filing an Offer In Compromise with the IRS?
If the IRS rejects your OIC, you have now provided the IRS all the information they need to know exactly how they can collect on the debt you owe, such as who your current employer is, where your bank accounts are and what kind of property you own. This is why you should have a Houston tax attorney analyze your situation and advise you of your options first rather than just filing an OIC as a one-size-fits-all approach.
How much will I have to offer the IRS for an Offer in Compromise?
The IRS has a fairly mechanical formula for determining the amount you must offer. A Houston tax attorney will help you calculate what this number is for you.
How long will I have to pay the Offer In Compromise?
If the IRS accepts a lump sum offer, you will need to pay 20% when you submit the offer and the balance in 5 (or fewer) monthly payments. If the IRS accepts a monthly payment plan, the first payment must be made when you submit the offer and the rest must be paid in monthly installments in no more than 24 months. As a part of your individualized plan, a Houston tax attorney will explain to you the difference between offering a lump sum OIC and a payment plan OIC.
The IRS often accepts payment of the tax debt in full over time. A longer term payment plan with the IRS is called an ‘Installment Agreement.’ The more you owe the IRS, the more you may have to disclose to the IRS before they will consider agreeing to a long-term payment plan. Unlike an offer in compromise, a payment plan will repay your taxes in full. This may be a good option when an Offer In Compromise is not right for you.
While the table below is an over simplification of the process, here are the dollar thresholds the IRS uses (based on the back taxes you owe):
|If you owe:||The payment plan process:|
|Less than $10,000||Can be nearly automatic as long as the plan proposes to pay the IRS in full within 3 years.|
|Between $10,000 and $25,000||Can be more difficult and may require financial information. The maximum term for this amount is 6 years.|
|Between $25,000 and $50,000||Will require a lot of financial information and documents (including IRS forms disclosing your assets).|
The maximum term for this amount is 6 years.
|More than $50,000||Will require detailed financial information, including IRS forms and back-up documentation about your financial situation and assets.|
There is no maximum term for a payment plan if you owe the IRS more than $50,000.
-Secure a Release of IRS Tax Lien During the Sale of a Real Estate
If the IRS has filed a tax lien against you, the lien will stop the sale of real estate. We can help secure a partial release of lien or release of lien from the IRS so that the title company will agree to allow the closing of the sale to occur.
When you are in a tough financial situation, the IRS may consider your debt to be uncollectable (sometimes called ‘Code 53’ due to the internal computer code the IRS uses). If collecting from you means you may not be able to put food on the table, pay for medical treatment, hold down a job, etc., the IRS may deem the debt uncollectable.
The downside is that this is not permanent and interest and penalties continue to accrue. The IRS can periodically evaluate your situation and can move you out of uncollectable status in the future. This is a band-aid approach and should be used only if the situation is right.
-Discharging IRS Tax Debt in Bankruptcy
Some IRS back tax debt can be discharged (wiped out) in bankruptcy. Or your IRS tax debt may not be dischargeable right now but may become dischargeable in the future. Part of your individualized plan will include an analysis of what affect a bankruptcy would have on your back taxes both now and at a future date.
What we do not do:
While we do develop a personalized plan to deal with your tax debt, there are some aspects of dealing with the IRS that we do not handle. Don’t worry! If you do not have a good CPA or tax professional, we are happy to refer you to a local Houston CPA.
-We do not prepare unfiled tax returns
We save this work for your CPA or tax professional. While we are very familiar with the IRS collections process and the intersection between IRS tax debt and bankruptcy, we prefer that professionals intimately familiar with things like deductions and capital gains prepare your tax returns.
-We do not defend IRS Audits or File Appeals
We generally believe the person or company best suited to dispute the amount the IRS claims you owe is the person or company who prepared the tax returns. If you believe that person or company did not do a thorough job or dropped the ball along the way, we are happy to refer you to a Houston CPA or tax professional to represent you in the audit or appeal.
-We do not defend IRS Criminal Investigations
If you believe the IRS is investigating you regarding potential or actual criminal charges, we recommend you contact a lawyer for assistance immediately and are happy to refer you to one.
Who may need IRS tax debt help:
Anyone who owes the IRS back taxes may need help resolving their IRS tax debt. Owing IRS taxes does not make you a bad person. You may have had a one-time, unforeseen occurrence create the tax debt, or you may need to re-think how you handle your taxes moving forward. Realtors, truck drivers, doctors, folks in the construction industry and other independent contractors are paid on a ‘1099’ basis. If you earn a living as an independent contractor, you may need some advice to not only resolve your back IRS taxes but to also help you avoid finding yourself in this position again in the future.