Dallas, TX IRS Tax Problem Survival Guide

Receiving an IRS notice does not automatically mean you are in serious trouble, but it absolutely means you need to pay attention and respond appropriately. The IRS sends millions of notices every year, and they range from simple requests for additional information to formal audit notifications to collection actions for unpaid taxes. The single biggest mistake Dallas taxpayers make is ignoring an IRS notice or assuming it will go away on its own. It will not.

Every IRS notice includes a response deadline, and missing that deadline can result in the loss of important appeal rights, automatic assessment of additional taxes and penalties, or the escalation of your case to active collections. If you receive a notice and you are unsure what it means or how to respond, that is exactly when you should reach out to a qualified tax representative.

Mike Habib, EA has spent over two decades helping taxpayers across the country respond to IRS notices strategically and effectively. His approach is simple: understand the notice, assess your options, and respond in a way that protects your rights and minimizes your exposure. Most importantly, Mike handles your case personally—you will not be passed off to a junior associate or seasonal preparer.

An IRS audit can be one of the most stressful experiences a taxpayer faces, but understanding the process takes much of the fear out of it. There are three primary types of IRS audits: correspondence audits conducted entirely by mail, office audits that require you to visit a local IRS office, and field audits where an IRS revenue agent comes to your home or place of business. Dallas taxpayers encounter all three types, and the approach for each is different.

The most important thing to understand about an IRS audit is that you do not have to face it alone, and you do not have to represent yourself. As an Enrolled Agent, Mike Habib holds unlimited practice rights before the IRS, meaning he can represent you in any audit situation at any IRS office nationwide without you needing to be present. This is an enormous advantage—it removes you from the direct line of questioning, ensures that only relevant information is provided, and prevents the kind of inadvertent disclosures that can expand the scope of an audit.

Mike’s background as a former Controller at Xerox Corporation and Director of Finance at AEG gives him a unique perspective that goes far beyond what a typical tax preparer brings to an audit. He understands financial statements, internal controls, business operations, and cost accounting at a level that allows him to speak the IRS’s language while vigorously defending your position. For Dallas business owners facing a field audit, this corporate finance expertise is an invaluable asset.

Yes, and you absolutely should. The IRS has a term for taxpayers who have fallen behind on their filing obligations: non-filers. And in Dallas, where the economy moves fast and business owners are often juggling a dozen priorities at once, it is more common than you might think. Life happens—a business setback, a family crisis, a health issue, or simply feeling overwhelmed by the complexity of your tax situation can all lead to missed filings that snowball into multiple years of unfiled returns.

The good news is that the IRS generally wants you to come back into compliance rather than punish you into oblivion. In most cases, you only need to file the last six years of delinquent returns to get back into good standing. The bad news is that if you do not take action voluntarily, the IRS may eventually file substitute returns on your behalf—and those substitute returns will not include any deductions, credits, or exemptions you are entitled to, resulting in a tax bill that is almost always significantly higher than what you actually owe.

Mike Habib, EA specializes in bringing non-filers back into compliance in a methodical, organized way. He will review your situation, reconstruct income records where necessary, prepare all delinquent returns accurately, and negotiate with the IRS to minimize penalties—often securing first-time penalty abatement or reasonable cause relief where the facts support it. The goal is not just to get your returns filed but to ensure you owe the least amount legally possible.

Owing the IRS money you cannot immediately pay in full is one of the most common tax problems in the Dallas area, and it is also one of the most solvable. The IRS offers several formal programs for taxpayers who cannot pay their full tax liability, and choosing the right option depends on your specific financial circumstances.

Installment Agreements allow you to pay your tax debt over time in monthly payments. For balances under $50,000, these can often be set up relatively quickly. For larger balances, the IRS will require more detailed financial information, but manageable payment plans are still achievable in most cases.

Offers in Compromise (OIC) allow qualifying taxpayers to settle their tax debt for less than the full amount owed. Despite what late-night television commercials suggest, the OIC program is not a magic wand—the IRS applies a strict formula to determine whether you qualify. But for taxpayers who genuinely cannot pay their full liability based on their income, assets, and expenses, an OIC can be a legitimate path to a fresh start.

Currently Not Collectible (CNC) status is available for taxpayers who are experiencing genuine financial hardship. When the IRS places your account in CNC status, active collection efforts stop—no more levies, no more threatening letters. The debt does not disappear, but it gives you breathing room while your financial situation stabilizes.

Mike Habib, EA evaluates each client’s situation individually to determine which resolution path makes the most sense. His flat fee approach means you know exactly what the engagement will cost before you commit, and his competitive rates—typically $400–$500 per hour when hourly billing applies, compared to $850–$1,500 at large firms—make professional tax representation accessible to everyday Dallas taxpayers and small business owners. Many engagements are handled on a flat fee basis, which provides cost certainty from the very beginning.

Federal tax liens and bank levies are among the most aggressive collection tools the IRS has at its disposal, and they are unfortunately common in the Dallas area. A federal tax lien attaches to all of your property—your home, your vehicles, your financial assets—and becomes a matter of public record, which can devastate your credit and interfere with business operations. A bank levy actually seizes the funds in your bank account, and a wage garnishment directs your employer to send a portion of your paycheck directly to the IRS.

The critical thing to understand is that you have rights when it comes to liens and levies, and there are proven strategies for getting them released or discharged. Mike Habib, EA has extensive experience negotiating lien releases, levy releases, and wage garnishment modifications with the IRS. In many cases, entering into a compliant installment agreement or demonstrating financial hardship is enough to stop active levy action. In more complex situations, Mike may pursue a Collection Due Process hearing or request a Collection Appeal to challenge the IRS’s actions formally.

Payroll tax issues are among the most serious tax problems a business owner can face, and the IRS treats them accordingly. When a business fails to remit withheld employment taxes—Social Security, Medicare, and federal income tax withholding—the IRS views this as the business using the employees’ money for its own purposes. The consequences are severe: the IRS can assess the Trust Fund Recovery Penalty (TFRP), which makes any “responsible person” personally liable for 100 percent of the unpaid trust fund taxes.

For Dallas business owners, this means that your personal assets—your home, your savings, your investments—are at risk, not just the business’s assets. The IRS will conduct a Trust Fund Recovery Penalty investigation to determine who in the organization was responsible for collecting and paying over the taxes, and they can and will pursue multiple individuals within the same company.

Mike Habib, EA has deep experience defending business owners against TFRP assessments and negotiating resolutions for payroll tax liabilities. His corporate finance background—including his years as Controller at Xerox Corporation managing complex financials, payroll and tax compliance operations—gives him a practical understanding of business operations that is directly relevant to these cases. He knows how the IRS investigates these matters, what evidence they look for, and how to position your defense effectively.

This is an increasingly common scenario in the Dallas area, and the answer is: quite possibly. While Texas does not impose a state income tax, the state where your employer is located may still claim taxing authority over your income, depending on that state’s specific rules. States like New York, for example, have a “convenience of the employer” rule that can tax remote workers even when they are physically working from their home in Dallas.

Multi-state tax issues can also arise for Dallas business owners who have customers, employees, or operations in other states, creating nexus and potential filing obligations in those jurisdictions. The patchwork of state tax rules across all 50 states creates traps for the unwary, and the penalties for non-compliance can be substantial.

Mike Habib, EA prepares tax returns for all 50 states and has extensive experience untangling multi-state tax situations. Whether you need to file amended returns, respond to state tax notices, or establish a compliant multi-state filing strategy going forward, Mike’s nationwide practice provides the breadth of knowledge that a locally focused preparer simply cannot offer.

U.S. citizens and permanent residents are taxed on their worldwide income regardless of where they live. If you are a Dallas native who has relocated overseas for work or retirement, you are still required to file a U.S. federal tax return every year and may also have additional reporting requirements for foreign financial accounts (FBAR) and foreign financial assets (Form 8938). The penalties for failing to report foreign accounts and assets are extraordinarily steep—up to $100,000 or 50 percent of the account balance per violation in the most egregious cases.

Mike Habib, EA serves American expatriates and taxpayers with international tax obligations worldwide. He understands the Foreign Earned Income Exclusion, foreign tax credits, treaty provisions, and the Streamlined Filing Compliance Procedures that allow qualifying expats to come into compliance without facing the harshest penalties. If you have connections to Dallas but live and work overseas, Mike provides the same direct, personal service to international clients that he provides to those in the DFW metroplex.

The IRS Fresh Start Program is not a single program but rather a set of expanded provisions designed to make it easier for taxpayers to resolve their tax debts. Key components include expanded installment agreement thresholds, more favorable Offer in Compromise evaluation criteria, and penalty relief options for qualifying taxpayers.

For Dallas taxpayers, the Fresh Start provisions can be particularly beneficial because they lower the barriers to entering into manageable payment plans and increase the likelihood of settling tax debts for less than the full amount owed. However, navigating these provisions effectively requires a thorough understanding of IRS procedures and the ability to present your financial situation in the most favorable light within the rules.

Mike Habib, EA has helped hundreds of taxpayers take advantage of Fresh Start provisions to resolve their tax problems. He will assess whether you qualify, prepare the necessary applications and financial disclosures, and negotiate directly with the IRS on your behalf—all for a transparent flat fee that you agree to before the work begins.

Yes, and this is a provision that many Dallas taxpayers are not aware of until they receive a certification notice. Under Internal Revenue Code Section 7345, the IRS can certify seriously delinquent tax debt to the State Department, which can then deny issuance or renewal of your passport—or in extreme cases, revoke an existing passport. The current threshold for certification is $62,000 or more in assessed tax debt, including penalties and interest.

For Dallas residents who travel internationally for business or pleasure, or for those with ties to other countries, passport revocation can be devastating. Mike Habib, EA helps clients resolve certified tax debts quickly to obtain passport decertification, whether through entering into an installment agreement, making an Offer in Compromise, or demonstrating hardship status. Time is critical in these cases, and Mike’s direct involvement ensures your case moves forward without unnecessary delays.