Tax Attorney for Houston*

As an IRS tax attorney for Houston, I hear all the time, “What is the IRS Fresh Start Initiative?” It is actually a collection of different programs and relief options that the IRS has for struggling taxpayers to get back tax relief. The IRS Fresh Start program was started back in 2011.

IRS Tax Attorney for Houston, TX Explained “What is the IRS Fresh Start Program?”

It’s not a new thing. It was actually started over ten years ago. The focus of the program is to help taxpayers set things right and move on with their lives. One of the goals of the program is to help taxpayers get their taxes handled within six years or less.

The program helps taxpayers by:

• Decreasing the amount of tax liens that are filed.
• Allowing for certain tax lien withdrawals while on a direct debit installment agreement.
• Easier lien releases when the taxes are paid off.
• Easier ways to enter into IRS payment plans.
• Expanding the Offer in Compromise program and making it easier to qualify.

How to Qualify for the IRS Fresh Start Initiative

Generally, there are no “hard fast” rules for who qualifies, but there are some factors that make good candidates for the Fresh Start program. As an IRS tax attorney, I evaluate each of our clients to make sure that they get the best option possible.

• For installment agreements, having a balance under $100,000 is typically idea if a Revenue Officer is involved. If there is no Revenue Officer, then a balance under $250,000.
• Current and compliant with tax obligations (estimated tax/withholdings and all returns filed for the prior six years).
• No previous installment agreement defaults (not a big deal if you are doing the Offer in Compromise).
• Net assets that are less than the tax liability (primarily for the Offer in Compromise).
• Larger household sizes and limited household income (this varies, so there is no hard fast rule here).

Although the list is not exhaustive, it is important to consider each of those. Additionally, the IRS considers future income potential. Someone who is unemployed will likely be re-employed eventually. The IRS can also consider other factors, like health issues or other extenuating circumstances. A trained tax attorney for Houston, TX will know how to issue-spot your specific circumstance.

IRS Fresh Start Options as Explained by an IRS Tax Attorney

There are basically three programs through the IRS Fresh Start initiative.

(1) Long-term Installment Agreements

The most common is the installment agreement. These are typically referred to as “streamlined installment agreement” if the amount is under $50,000. The monthly payment plan is determined (approximately) by dividing your tax balance (plus assessed interest and penalties) by 72 months.

If the amount is over $50,000, the process is typically the same (up to $100,000 if a revenue officer is involved, or up to $250,000 if the account is with ACS). For amounts that exceed these thresholds, full financial disclosures (typically on a form 433-A or 433-F) must be included to determine the amount you can afford to pay each month.

Keep in mind, on a streamlined installment agreement, the payment is for 72 months. However, because interest continues to accrue, there may be a balance at the end of the payment plan that you are still responsible for. As a tax attorney, I recommend that our clients increase the monthly payment by 5-10% to account for this.

It is also very important to not have any additional “balance due” notices after the installment agreement is established. This means, that you cannot owe again while on the installment agreement.

If you owe again, it will default the installment agreement and the IRS will “kick you out” of the Fresh Start program. This means that they will likely file tax liens against you and may commence enforcement action, including wage garnishments.

(2) Offer in Compromise

The IRS Offer in Compromise is the classic tax settlement option. The biggest hurdle here is that you have to have limited assets. Or, at least less assets than what the tax liability is. The IRS will also consider your future income potential, so your income (relative to your household size) should be relatively small.

This is a very formal process and is a calculation. There is not a lot of “negotiating” like you may think. It is not like you call the IRS and offer them some cash to make this go away. That is not how it works at all.

The IRS will calculate your Offer amount on the form 433-A (OIC). It is the sum of your net assets and your net monthly income annualized.

If you end up with an accepted Offer, it is very important that you do not owe past the April deadline for the next five years. This will default the Offer and cause the back tax to come back. A tax attorney for Houston will harp on this point a lot during the process.

(3) Financial Hardship – Currently Not Collectible

As a last resort, if you are under a financial hardship (as defined by the IRS), then the IRS may simply close your collection case as part of the IRS fresh start program.

The back tax doesn’t go away, but the IRS just doesn’t try to collect on it. Unfortunately, they will likely file a tax lien under this scenario, but if you don’t have real estate, then it is likely not that big of a deal.

Houston is the biggest city in Texas, and fourth in the U.S. in terms of population. With a broad economy that includes industrial, energy, aeronautics, and transportation, it is important to choose an IRS tax attorney that understands how the IRS works and operates. Houston has been nicknames the “Bayou City”, “Space City”, “H-Town” and “the 713.” Pick an IRS tax attorney that understands and appreciates this great city of Texas!

Get a Fresh Start with an IRS Attorney Today

If you are ready to have an IRS tax attorney for Houston, Texas look at your case to see if you qualify for the IRS Fresh Start program, click here to get the process started today. Or call us directly for a free consultation at 330-331-7611.