Tax Liens

The Internal Revenue Service is allowed under federal law to place a tax lien on your personal property, real estate, bank accounts and personal possessions to settle back taxes. The tax lien allows the IRS to ...

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Texas IRS Tax Settlement Options

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Internal Revenue Service Tax Settlement Options

Texas Taxpayers who have outstanding federal tax debt may be able to settle their tax liability for pennies on the dollar. The IRS may be willing to negotiate a tax debt settlement with you in hopes that you will pay all future tax obligations. It is important if you are considering a tax settlement plan, to contact a Texas Tax Attorney, enrolled tax agent or certified public accountant who can help file past tax returns and answer questions about the best tax settlement option for you and your family.

You do not have to avoid phone calls or refuse to open your mail anymore. Do not let the Internal Revenue Service intimidate you. Contact a Tax professional for help.

Offer in Compromise

If you are a Texas resident and you have IRS tax debt, you may qualify for an Offer in Compromise (OIC). The Internal Revenue Service can settle or compromise your federal tax debt by accepting less than you owe. Not every OIC will be accepted but many offers may eventually be won on appeal.

If you are considering Offer in Compromise to settle your tax debt, contacting an experienced Texas Tax professional who understands the rules and regulations of the Internal Revenue Service can help drastically lower you federal tax bill. Offer in Compromise is a very common tax settlement program, but it is also very complicated and time consuming. Texas Tax professionals have the experience needed to complete the process and help resolve your federal tax debt.

To qualify for Offer in Compromise you must meet one of the following conditions:

  • Effective Tax Administration- The Internal Revenue Service may accept your OIC offer if they decide paying your back taxes will cause “economic hardship which is unfair and inequitable”. This condition is hard to meet and most often is granted for the elderly and disabled.
  • Doubt as to Collectibility- The IRS will grant OIC under this condition if they conclude they will not be able to collect the federal tax debt. Under this condition there is not question of the accuracy of the federal tax debt.
  • Doubt as to Liability- The Internal Revenue Service may grant an OIC if they question the accuracy of the federal tax debt liability you have been assessed.

If the Internal Revenue Service approves the Offer in Compromise application several conditions must be met:

  • Taxes must be paid on time for the next five years.
  • The Offer in Compromise plan must be completed as outlined.
  • All tax returns must be completed on or before the tax extension deadline.
  • All tax refunds will be used to pay down your outstanding federal tax debt.

Installment Agreement

The IRS Installment Plan will allow you to break up your federal tax debt and repay it in monthly “installments”. There are a variety of different types of plans you can use, depending on the amount of money you owe. If you owe $10,000 or less, not including taxes and penalties, you may be able to use a guaranteed installment plan agreement. The entire amount will have to be repaid with in three years. If you owe $25,000 or less, the Internal Revenue Service may allow you use a streamlined installment agreement. You will have to complete the payment plan with in five years. If you owe more than $25,000, it is important to contact a Texas Tax Professional who can help negotiate an installment plan with the Internal Revenue Service.

To qualify for an Installment Plan the following qualifications must be met:

  • Individuals who are self-employed must pay quarterly tax estimates.
  • All tax returns for past federal tax liability must be paid.
  • All returns for previous tax debt must be filed and paid for the five years before the current federal tax debt you can not pay.
  • Individuals can not have another Installment Plan agreement with in the last five years.

Partial Payment Installment

The IRS has created a new type of Installment Plan which allows partial payments for federal tax liability called the Partial Payment Installment Agreement. The IRS will cease collection actions against you if you are making payments per the Partial Payment Installment Agreement. The IRS will conduct reviews every two years to assess if the terms of the PPIA need to be terminated or if higher payments can be made.

Currently Not Collectible

Certain Texas taxpayers may not be able to make partial payments for federal tax debt and may not qualify for any other type of IRS tax settlement plan. Under certain circumstances the Internal Revenue Service may declare your account as Currently not Collectible. Under this classification, the IRS will halt all enforcement actions and release levies. The debt does not go away and penalties and interest will continue to accrue.

Penalty Abatement

Failure to pay your taxes by the due date can result in penalties. Penalties may also be assessed for under reporting your federal tax debt, failing to file or falsely filing for a refund. Additional fees may be assessed if you misrepresent financial data on your tax return.

Texas taxpayers who are assessed IRS penalties may be able to have them lowered or eliminated by requesting a Penalty Abatement. The IRS will not dismiss all penalties. Taxpayers must have a valid reason to request Penalty Abatement. Experienced Tax Attorneys and tax professionals can offer advice for the Penalty Abatement request.

Do I Need Texas Tax Professional?

Federal Tax debt is not going to go away. The Internal Revenue Service will continue to try and collect all past tax debt and they can be extremely aggressive in their collection efforts. Unlike other debt collection agencies, they will have the ability to garnish your wages, seize your assets and levy your bank accounts.

Texas Tax Professional are experienced at solving a variety of tax issues including:

  • Completing past due tax forms
  • Helping you avoid bankruptcy
  • Analyzing ways to reduce your tax liability
  • Tax Settlement options (Partial Payment plans, Penalty Abatements, Installment Agreements, Offer in Compromise, Currently not Collectible)
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