Best Tax Relief Companies To Reduce Your Tax Debt Revised 2022

Content of the material

  1. Money Classic
  2. 50 years of Money. Celebrate with Money Classic throughout the year.
  3. Video
  4. What is the minimum tax debt Optima Tax Relief will consider?
  5. How Does Optima Tax Relief Work?
  6. Consultation
  7. Investigation
  8. Resolution
  9. If Your Offer Is Accepted
  10. 2. Community Tax – Most Affordable Investigation and Fees
  11. Community Tax Relief Company Pros:
  12. Community Tax Relief Company Cons:
  13. Types of Tax Help Services Offered by Community Tax: 4/5
  14. Minimum Debt Required for Community Tax Services: 5/5
  15. Reputation of Community Tax Services: 4.5/5
  16. Community Tax Experience: 4.8/5
  17. Message From Our Editor
  18. What We Love About Optima Tax Relief
  19. What Could Optima Tax Relief Do Better?
  20. The Verdict
  21. How We Chose the Best Tax Relief Companies
  22. Availability
  23. Cost
  24. Credibility
  25. 7. Precision – Best Payment Plans
  26. Precision Tax Relief Company Pros:
  27. Precision Tax Relief Company Cons:
  28. Types of Tax Help Services Offered by Precision: 3/5
  29. Minimum Debt Required for Precision: 3/5
  30. Reputation of Precision Tax Services: 4/5
  31. Precision Experience: 4/5
  32. How We Selected the Best Tax Relief Companies
  33. Best Tax Relief Companies Buying Guide
  34. What Does Tax Relief Refer To?
  35. What Are the Most Common Tax-Related Problems?
  36. How Much Will Tax Relief Cost You?
  37. How Does a Tax Relief Company Help?
  38. What Are Your Options for Tax Relief?
  39. How Can I Choose the Right Tax Relief Company for Me?
  40. Do Those Tax Relief Companies Really Work?
  41. Optima Tax Relief Complaints
  42. Optima Tax Relief Q&A
  43. Conclusion
  44. How much can Optima save me?
  45. Optima Tax Relief Client Bill Of Rights
  46. Who Is Eligible
  47. Optima Tax Reliefs Other Services
  48. Tax Consultation
  49. Tax Negotiation
  50. Tax Preparation
  51. Tax Resolution
  52. Frequently Asked Questions

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What is the minimum tax debt Optima Tax Relief will consider?

Optima Tax Relief will only consider customers with at least $10,000 in tax debt. Taxpayers with less than $10,000 in tax debt may benefit from a debt consolidation loan or credit counseling services.

How Does Optima Tax Relief Work?

On its website, Optima advertises a four-step process for resolving your tax debts. 

Well, it’s really three steps — the final st

Well, it’s really three steps — the final step being “freedom,” presumably from tax debt.

Consultation

To sign up for Optima, you must first request a free tax consultation through its website.

Although the company claims that a “senior tax associate” will reach out to review your tax situation, a number of client reviews suggest that a non-credentialed salesperson will be your first contact with the company.

I understand that Optima needs to make money through selling its services, but the company’s description of the initial consultation makes it seem like a credentialed tax expert will actually be reviewing your case during this phase.

If that is the case, Optima should be upfront that the initial consultation is an opportunity to gather preliminary information and lay out Optima’s service offerings.

If you do decide to move forward with Optima, you will proceed to the investigation phase.

Related: How to File Your Back Taxes, Avoid Penalties, and Get Your Life Back on Track

Investigation

My research indicated that you will be required to pay a $495 fee during this phase, which will last up to 30 days.

During this stage, Optima claims it will contact the IRS (and/or state tax agency), address any urgent collection efforts, and gather the required information to build a case.

But many reviews claim that once Optima collects its fee, the company becomes noncommunicative. In some cases, reviewers claimed that Optima provided inaccurate information upon completing the investigation.

For example, in one review, a former client claimed that during the investigatory phase, “[Optima] called me and told me I owe back taxes…I called and spoke to the IRS I owe no back taxes and all years were filed.”

If this claim is true, I find it troubling because determining whether someone owes back taxes should be easy to uncover during a 30-day review period.

Resolution

In the resolution phase, Optima advertises that it will work to achieve the most optimal outcome based on the findings of the investigation.

Although some reviews show that Optima significantly reduced their clients’ tax debt, many reviews claimed that all the company did was set up an installment plan on their behalf with the IRS.

Sometimes an installment plan is the best option, but the reviews suggest that clients were surprised by this outcome. If these client reviews are true, Optima should be upfront that an installment plan may be the best and only option.

Unfortunately, I suspect that what may have happened in these cases is the Optima “senior tax associate” – their fancy term for salesperson – did not adequately clarify that Optima may not actually be able to settle clients’ tax debt with the IRS for less than they owe.

Obviously, the notion of settling one’s tax debt for less than one owes – that is, obtaining an offer in compromise with the IRS – is an appealing one. I imagine that many individuals who reach out to Optima do so with such a settlement in mind.

Optima likely knows this – their marketing highlights the stories of clients who owed the IRS a substantial amount of money and now owe nothing – and I imagine that their sales scripts take this into account.

Of course, I have never been on a sales call with Optima tax relief salespeople, so this is simply my speculation based on what I’ve seen in third-party reviews of Optima Tax Relief’s services – reviews that may or may not be telling the whole story.

Related: How Much to Offer in Compromise to the IRS

If Your Offer Is Accepted

  • You must meet all the Offer Terms listed in Section 7 of Form 656, including filing all required tax returns and making all payments
  • IRS doesn’t release federal tax liens until your offer terms are satisfied
  • Certain offer information is available for public review by requesting a copy of a public inspection file.

2. Community Tax – Most Affordable Investigation and Fees

Community Tax Relief Company Pros:

Community Tax Relief Company Pros:

  • Low minimum debt required
  • Low initial fees
  • Provides education for agents
  • Offers transparent pricing options

Community Tax Relief Company Cons:

  • Limited money-back guarantee
  • High fees for complex tax situations
  • Limited tax debt relief for state taxes

Types of Tax Help Services Offered by Community Tax: 4/5

Like most tax relief services, Community Tax provides various options to help with debt relief. They can assist you with penalty abatement, offer in compromise, tax assurance programs, and “currently not collectible” status. However, they do not provide help with innocent spouse relief.

While Community Tax’s services are offered throughout the country, you may have to meet with them remotely. If you are less enthused about remote meetings, they may not be ideal.

Minimum Debt Required for Community Tax Services: 5/5

The minimum debt requirement for Community Tax is only half of the national standard. If you owe as little as $5,000, you may be qualified to seek help from Community Tax. Given that every client’s financial situation is different, financial hardship can occur just as quickly with $5,000 in debt as it can $10,000. The impact of tax debt depends heavily on your income and cost of living.

Reputation of Community Tax Services: 4.5/5

Community Tax has been accredited since 2015 and has an A+ rating with the BBB. They are open to hearing every detail about your case and have various positive reviews. In addition, they respond quickly to all consumer and client complaints.

Community Tax Experience: 4.8/5

Community Tax boasts over $800 million in resolved taxes and claims to have helped over 100,000 people with their tax debt. While they have only been in business for about 12 years, their staff includes licensed tax practitioners. Resolving tax debt is a complex scenario that requires experience. The founders of Community Tax were bankers and attorneys with plenty of experience in debt resolution.

Message From Our Editor

What We Love About Optima Tax Relief Optima Tax Relief has tax attorneys on staff who are licensed by the IRS in all 50 states. Although other companies claim to have tax lawyers, they rarely list their names and credentials. And if they do, it is usually just one or two lawyers who rent out their name to provide a veneer of respectability. Optima Tax lists the names and resumes of 10 of their tax attorneys and eight of their enrolled agents so that you can check their credentials. OTR offers a 15-day money-back guarantee and flexible installment payments with no financing costs. They are accredited by the National Association of Enrolled Agents (NAEA) and the National Association of Tax Professionals (NATP). The firm has a large team (+400) of tax professionals that can help with an audit, negotiate a tax settlement, help you prepare your taxes, and protect you from further tax problems once you’re tax debt-free. Its customer portal allows taxpayers to check their account status, upload documents, and communicate with a dedicated tax professional. What Could Optima Tax Relief Do Better? There are cheaper tax relief firms. Although OTR’s rates are competitive, there are companies with lower prices. The money-back-guarantee could be longer. Although Optima Tax is one of the few tax relief firms to offer a money-back guarantee, it would be nice if it gave taxpayers a longer period to claim it. After all, the investigation phase takes two to four weeks, and the money-back guarantee only applies to the first 15 calendar days. The Verdict The bottom line is that Optima Tax Relief has the resources and expertise to deal with the most complex tax problems. If you’re looking for a reliable and professional tax relief company, Optima Tax Relief is a sound choice. While it isn’t the cheapest firm you’ll find, its fees are competitive, particularly when you consider it has attorneys on staff with J.D. and LL.M. degrees in Taxation who have practiced law before the United States Tax Court and Supreme Court of California. Even if you’re on a tight budget and price is an important factor, don’t automatically conclude you can’t afford the representation of a high-end firm. You may be surprised at how affordable the fees are when you break them down into interest-free installment payments.

How We Chose the Best Tax Relief Companies

If you’re looking for professional assistance with your tax debt issues, consulting a tax relief company is likely at the top of your mind. While it is entirely possible to negotiate common tax debt issues yourself directly with the IRS, consulting a professional can often provide greater peace of mind. We used the following criteria to choose the best tax relief companies:

Availability

When people think of tax debt relief, they mostly think about the IRS, which is a federal agency. However, tax debt can also impact people at the state level. We picked companies that could deal with both federal and state tax issues and that were available nationwide.

Cost

We chose companies that offer free consultations and flexible payment plans, making their services accessible to all who need them.

Credibility

To ensure that you only work with companies with a solid track record, we evaluated tax debt relief companies’ reputation by looking at their record with the Better Business Bureau and customer reviews on websites such as Trustpilot.

We also only picked companies with at least one certification, accreditation or membership in major tax professional organizations such as the National Association of Tax Professionals (NATP), the National Association of Enrolled Agents (NAEA), and many others.

7. Precision – Best Payment Plans

Precision Tax Relief Company Pros:

Precision Tax Relief Company Pros:

  • Payment plans with no interest
  • Free consultations for new clients
  • 30-day money-back guarantee if no resolution

Precision Tax Relief Company Cons:

  • No representation for audit defense
  • $10,000 minimum tax debt
  • Limited state tax representation

Types of Tax Help Services Offered by Precision: 3/5

Precision offers many of the same services as other tax relief companies. For example, they handle almost every type of federal debt relief, on top of help with wage garnishment and levies. However, they do not offer audit representation.

Minimum Debt Required for Precision: 3/5

Like some of the other companies on the list, you must have at least $10,000 in tax debt to qualify as a client. When it comes to affordability, they offer a 30-day money-back guarantee, which is more than many other companies.

Reputation of Precision Tax Services: 4/5

Precision has been operating since 1967 as one of the oldest companies on the list. Additionally, they have had a BBB accreditation since 2011. Like other tax relief companies, they have an A+ rating. Even if they cannot help you as a client, they may still provide valuable insight. Their reviews are primarily favorable.

Precision Experience: 4/5

Despite Precision’s long history in debt relief, they mostly handle IRS tax relief. If you need options for state tax debt relief, they may not be an ideal choice for you.

How We Selected the Best Tax Relief Companies

There are various factors potential clients look for when choosing a tax relief company:

  • Cost of service
  • Time until case resolution
  • Experience with complicated business situations
  • Variety of services
  • Minimum debt required
  • Reputation among clients

We used these criteria to analyze the different tax relief company information to determine the best tax relief companies. We encourage you to connect with companies that provide flexibility and reasonable pricing.

Best Tax Relief Companies Buying Guide

The following FAQs may help you understand the various tax relief options and how you can determine which of the best tax relief companies are right for your case.

What Does Tax Relief Refer To?

Tax debt relief is a strategy to help taxpayers minimize or erase their tax debt. State and federal governments present various options to help those going through financial hurdles pay their taxes. Some forms of tax relief may include settlements, wage garnishments and payment plans.

What Are the Most Common Tax-Related Problems?

If you do not file your taxes or make a mistake while filing your taxes, you may face consequences from the IRS, including penalties and fees. In some cases, financial hardship may make it impossible to pay your debt. For example, those taxes may accrue interest and grow to an unmanageable level.

The IRS may send you collection notices if you do not pay your taxes. The IRS can go directly to your paycheck and garnish your wages when you ignore the debt for too long. The portion the IRS can take depends on your marital status and dependents. The IRS may continue to garnish your wages until you satisfy your debt.

Other issues taxpayers face includes tax levies, liens and audits. A tax levy allows the IRS to seize property to pay your debts, whereas levies are similar to wage garnishments. The IRS releases a public notice to banks, lenders and other financial institutions to declare their right to collect any proceeds from property sales.

A tax audit occurs if there are any irregularities in your taxes. Generally, only wealthy individuals have to deal with a tax audit. You are more likely to face an audit if you make more than $10 million.

How Much Will Tax Relief Cost You?

Every case is going to have a different answer. Tax relief companies may use two different models for pricing. One model asks for a percentage of your debt, and the other asks for a flat hourly rate. Some companies will choose which model to use based on the complexity of your case. Most people have to pay at least $1,000 to $1,500, though this can vary.

Companies are most likely to ask for about 10% to 15% of the tax debt when using a percentage pricing model. If you owe a high amount to the IRS, you may prefer the hourly rate. An average hourly rate may range from around $250 to $1,000. Some companies might have different prices for different services. For instance, if you need a basic investigation, you may pay $250, but if you need an offer in compromise, they may charge closer to $1,000. It all depends on the complexity of the service and the company itself.

All clients can discuss pricing before entering into a contract with a tax relief company. Ask for a quote in writing and inquire about any additional fees.

How Does a Tax Relief Company Help?

Anyone can try to manage tax relief options on their own. However, tax professionals are more likely to have experience dealing with complex cases than the average person. The company works with the IRS on your behalf. For example, individuals who have multiple assets, bank accounts or years of unpaid taxes may have a complicated situation that is difficult for the taxpayer to navigate. Sometimes, a tax relief company identifies errors that the IRS missed.

If you seek tax relief and make mistakes on the forms or in negotiations, you could pay more over time in interest and fees. You may have limited time to research tax law and fill out the paperwork necessary to seek relief.

Even if you are unsure whether you need a tax relief company, a free consultation can help determine whether it’s necessary. Most firms will meet with a client to discuss a case, regardless of the size of the debt or the complexity of the case.

Some tax relief companies may also provide services that are not related to debt relief. For instance, if your tax returns are being audited, a tax professional may help you resolve them. If you expect to have audits within the next three years, you may benefit from a tax relief company on retainer.

What Are Your Options for Tax Relief?

The IRS provides various options for debt relief. Depending on the state, you may also find similar programs on the local level. The following are standard debt relief options:

  • Innocent spouse relief
  • Offers in compromise
  • Fresh Start Program
  • Currently not collectible
  • Penalty abatement
  • Installment agreement

You may seek innocent spouse relief if your former or current spouse made an error of omission on the tax paperwork. When you file for innocent spouse relief, you ask to be exempt from any penalties due to the mistakes. To be eligible for innocent spouse relief, you have to prove that you had no way of knowing about the omissions.

An offer in compromise is a strategy to settle your debt for less than you owe. The IRS assesses your expenses, assets, income and ability to pay back your debt. The IRS will only consider offers in compromise if they believe that a lower amount is all that can be collected in a reasonable amount of time.

The Fresh Start Program allows more people to access debt relief. The program lowers the requirements for various IRS relief programs. For example, the IRS may look at only one year of future income for offers paid in fewer than five months. For offers paid in six to 24 months, the IRS looks at two years of future income. To qualify, all offers need to be paid within 24 months.

Currently not collectible means that you cannot pay the taxes owed. You usually apply for CNC status if you cannot reasonably afford the cost of living on top of your taxes. If you have difficulty paying your bills because of the tax payment, the IRS may consider you currently not collectible. The IRS will review your income to determine if you can pay your debt every year.

Penalty abatement refers to relief options where the taxpayer asks for lesser penalties for failing to make a payment or missing a deadline. You need to have a clean record for at least three years to qualify for this debt relief alternative.

Installment agreements are among the most common debt relief options. An installment agreement allows you to pay your taxes over a specified period of time. You may choose short-term payment options for up to 180 days or a long-term option. Long-term options refer to any payment plan that lasts as long as you need to pay the debt.

How Can I Choose the Right Tax Relief Company for Me?

Every tax relief company has its shares of advantages and disadvantages. In some cases, the disadvantages of one company may be worth it for one client where it wouldn’t be worth it for another. The tax relief company you choose depends heavily on your tax situation. When looking into tax relief companies, think about what you may need. The common deciding factors include:

  • Cost
  • Experience
  • Credibility
  • Availability

Sometimes, a consultation can help you obtain a feel for the best tax relief companies for your situation.

Do Those Tax Relief Companies Really Work?

Tax relief companies have a bad reputation that comes from an industry littered with poor business practices and scams. Disreputable tax relief companies may lure customers in with false promises, continue upcharging them with more fees, and eventually leave them in worse debt than they began with.

On the other hand, good tax relief companies will be honest about whether or not you can benefit from their services, won’t make any promises about specific outcomes, and will charge up-front transparent fees. We’ve also found that the most reputable tax relief companies involve customers in the process through education and resources, hoping to set the customer up for long-term success to avoid recurring tax debt in the future.

The bottom line is that it’s important to realize that tax relief companies don’t do anything you couldn’t technically do on your own by working directly with the IRS. The idea is that, as experienced professionals, tax relief companies will pay for themselves by negotiating more effectively and generating a better outcome.

Optima Tax Relief Complaints

While the company boasts many satisfied customers, Optima Tax Relief has some mixed reviews. Accredited and “A+” rated by the Better Business Bureau, the company is also graded 9.5 out of 10 stars by ConsumersAdvocate and takes the third spot in the tax relief category. Yelp ratings only average out to 2.5 out of 5 stars. Most complaints are regarding overpromising a positive outcome, the lack of transparent pricing, and the inability to reach a representative when needed.

Optima Tax Relief Q&A

  • What sets Optima Tax Relief apart from other tax relief services? Optima Tax Relief has a team of tax professionals with over 25 years of experience. All work gets completed in-house with no cases outsourced to an unknown entity. With over $1 billion in resolved tax debt, Optima Tax Relief has extensive experience with mediating issues between taxpayers and the IRS.

  • In what states are Optima Tax Relief services available? Optima Tax Relief services are available nationwide. Optima can legally represent United States taxpayers living in all 50 states and abroad.

  • How long does Optima Tax Relief’s Two-Phase process take? Depending on the complexity of your case, the Optima Tax Relief process could take from two to 10 months. However, most cases resolve within six months.

  • Does Optima Tax Relief offer any guarantee? Yes, Optima Tax Relief offers a 15-day money back guarantee on their services.

  • Are there any tax relief services Optima does not provide? Optima Tax Relief provides representation for tax relief programs and strategies, except asset seizure negotiation.

Conclusion

Optima Tax Relief can help if you’re struggling with what seems like insurmountable tax debt. The company has an established reputation for taking care of customers by following the Client Bill of Rights and is prepared to assist with more tax resolution programs than other companies offer. Optima Tax Relief will assess your situation, give you options, make a plan to rescue your finances, and help you get in compliance with the IRS.

How much can Optima save me?

How much you can save by hiring Optima will depend on several factors, such as your income, basic living expenses, and how much tax debt you have. The more you owe, the more you can save by having Optima help you avoid penalties or settle your debt for less than you owe.

Optima admits that each case is different and that the company might not be able to save you any money. During your consultation, it’s worth asking for an estimate of your savings and fees to ensure sure it makes sense to work with the company.

The company claims to have helped its customers resolve more than $1 billion in tax debt.

Optima Tax Relief Client Bill Of Rights

Optima’s Client Bill Of Rights defines their relationships with customers.

Optima makes a real effort to live up to those promises, which is why they get such high scores on customer service. 

Who Is Eligible

Confirm you’re eligible and prepare a preliminary proposal with the Offer in Compromise Pre-Qualifier Tool.

You’re eligible to apply for an Offer in Compromise if you:

  • Filed all required tax returns and made all required estimated payments
  • Aren’t in an open bankruptcy proceeding
  • Have a valid extension for a current year return (if applying for the current year)
  • Are an employer and made tax deposits for the current and past 2 quarters before you apply

Optima Tax Reliefs Other Services

Optima Tax Relief doesn’t just handle tax relief. They provide a range of other tax-related services.

Tax Consultation

This service is offered to customers facing an IRS or state collection action. 

This consultation is more than just 1 simple phone call and gives you access to a team of consultants, attorneys, enrolled agents, and CPAs.

👉 A tax consultation can provide you with the guidance and representation you need to get through a collection action with as little damage as possible.

Tax Negotiation

The team at Optima is known for its skills in negotiating with the IRS. They have licensed professionals that specialize in helping you resolve your tax dilemmas.

Depending on your financial situation and how much you owe, you might be able to set up a payment plan or even debt reduction.

Tax Preparation

Optima Tax has a team of tax preparers, CPAs, and attorneys ready to assist with your tax preparation needs.

Tax Resolution

Optima Tax Relief provides experience – based tax resolution advice. They will offer guidance and representation needed to get through the IRS resolution process. 

These are some of the tax resolution problems and solutions that Optima can help you address:

  • Audit Representation
  • Criminal Tax Defense
  • Currently Not Collectible
  • Dealing with the IRS
  • Innocent Spouse Relief
  • Installment Plans
  • IRS Tax Discharge
  • IRS Tax Expiration
  • Levy Release
  • Offer In Compromise
  • Payroll Tax Debt Relief
  • Penalty Abatement
  • State Tax Issues
  • Stop Wage Garnishment
  • Tax Lien Removal
  • Tax Preparation and Planning
  • IRS Tax Expiration
  • Unfiled Tax Returns

If you have any questions about the IRS collection process or would like more information about how Optima can help with your IRS tax problems, get a consultation today.

Frequently Asked Questions

  • How much does it cost to use Optima Tax Relief?

    Optima does not disclose its fees, but my research indicated an initial investigation fee of $495. Based on the BBB client reviews, the typical resolution fee ranged from $1,200 to $7,000. Some clients cited higher fees, including an $18,000 fee in one review.

  • How long does it take Optima Tax Relief to work?

    Optima’s estimated turnaround time is 2-6 months.

  • Who owns Optima Tax Relief?

    Optima Tax Relief was founded by Harry Langenberg and Jesse Stockwell, who were students at the Wharton Business School at the University of Pennsylvania.

  • Does Optima Tax Relief help with state taxes?

    Yes, Optima helps with state taxes, but it is unclear whether this service is available in all 50 states.

  • Does Optima Tax Relief file taxes?

    Yes, Optima helps prepare delinquent and current-year returns.

  • Does Optima Tax Relief hurt your credit score?

    No, it does not appear that retaining Optima Tax Relief will affect your credit score.

  • How does Optima Tax Relief make money?

    Optima makes money primarily by working with clients to resolve their tax debts with the IRS and/or state tax agency. Optima receives an initial investigation fee to review your file, and a resolution fee ranging from $1,200 to $7,000 (although reviews show the fees can sometimes be higher).

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