Important note: if you’re considering any tax relief company, manage your expectations. Nobody can make all tax debt disappear. Professional help may get you a better deal, but the outcome will depend on your situation. If you expect magic, you’re likely to be disappointed.

About Optima Tax Relief

Optima Tax Relief describes itself as the nation’s largest tax relief company. It claims to have resolved over $3 billion in client tax liabilities. 

The Company is based in Santa Ana, CA, and has offices in Scottsdale, AZ, and Chandler, AZ. Online services are available nationwide (except Colorado and Minnesota).

Optima Tax Relief employs an in-house staff of enrolled agents, CPAs, and tax attorneys. Some tax relief companies may pass your case on to an outside law firm and keep part of your fee.

Optima Tax Relief was founded in 2010 by Harry Langenberg and Jesse Stockwell, both of whom remain with the firm as managing partners.

How Optima Tax Relief Works

Optima Tax Relief will work with federal and state taxes, but state tax services are not available in all states. You need at least $10,000 in tax debt to qualify for their services.

Optima Tax Relief works with many types of tax problems, including the following.

• Tax liabilities
• Back taxes
• Levies and liens
• Penalties and interest
• Wage garnishment
• Tax settlement
• Audit Defense
• Payroll tax negotiation

The company uses a three-step process.

• Consultation. You will have a free initial consultation with no obligation. A representative will review your case, lay out your options, and give you a realistic assessment of what Optima Tax Relief can do for you.
• Investigation. Optima Tax Relief will communicate with the IRS, examine your records in detail, and choose appropriate resolution options. You will have to authorize access to personal financial records.
• Resolution. The company will pursue the selected options and try to bring you into full IRS compliance. This does not mean you will have no tax debt. The goal is to reduce your debt as much as possible and work out a feasible payment plan for the rest.

There are many ways to resolve tax debt, and you will work with Optima Tax Relief to select the ones most appropriate for you. Here are some of the options available.

• Installment agreements will not reduce your debts but will make them easier to pay off.
• Offer in compromise is available to taxpayers experiencing financial distress.
• Penalty abatement or adjustment can reduce the penalties charged for previous issues.
• Extension requests may give you more time to pay without incurring penalties.
• Disaster-related relief provides tax breaks for people affected by natural disasters.
• Coronavirus tax relief may be available at both federal and state levels.
• Currently not collectible status may apply if you have no income or assets with which to pay your tax debt.
• The statute of limitations may apply in some cases dealing with older tax debts.
• Innocent spouse relief applies to taxpayers who are being held liable for a spouse’s mistakes or transgressions.
• A tax lien discharge removes a tax lien from a specific property, which may allow you to sell that property.
• A bank levy release means the IRS will no longer seize funds from your bank account. It usually occurs when you have agreed to a payment plan or other settlement.

It’s important to note that all of these devices are open to anyone. You do not need a tax relief company to apply for them. However, the process of assessing your eligibility, choosing options that are likely to be approved, and applying can be complex and challenging. 

Professional assistance does not guarantee success, but it may improve the probability of success.

Availability

Optima Tax Relief provides federal tax relief services online in all states except Colorado and Minnesota.

State tax services are available online in all states except Arizona, Georgia, Delaware, and Connecticut.

The Cost of Optima Tax Relief: Is It Worth It?

Optima Tax Relief does not disclose pricing information on its website. Pricing information given here is sourced from third-party websites and customer reviews. Prices vary according to the specifics of your case and you may be quoted prices higher or lower than those discussed here.

Optima Tax Relief appears to assess fees at two stages of the tax relief process.

• Investigation: you can expect an investigation fee of $295.
• Resolution: Resolution fees can vary widely with the circumstances of your case. Reported fees vary from $995 to $5000 and may be higher for complex cases with large tax liabilities.

These fees are substantial, but they are consistent with fees across the tax relief industry. Optima Tax Relief isn’t offering a screaming great deal, but pricing appears to be fair relative to competitors.

While the overall pricing scheme appears to be fair, it is not transparent: there’s no consistent pricing formula disclosed on the company’s website. Some customer reviews contain complaints indicating that the customers believe they were overcharged, and some reviews report payments much larger than those referenced above.

Optima Tax Relief will refund payments for the investigation phase within 15 days after the initiation of the investigation phase. No refunds are possible after 15 days or for the fees paid for the Resolution phase.

Optima Tax Relief: Customer Reviews

Customer reviews are a useful tool, but they have limitations. It’s important to understand how to evaluate customer reviews. Some reviews may be based on unrealistic expectations, and some companies have been known to manipulate reviews.

Let’s look at what major review sites can tell us about Optima Tax Relief.

Better Business Bureau (BBB)

Optima Tax Relief has an A+ rating from the Better Business Bureau (BBB). BBB ratings are based on the company’s responsiveness to complaints, not on the average of customer reviews.

The BBB site lists 686 complaints closed in the last three years and 209 in the last 12 months. The company has responded to all complaints and most appear to be resolved to the customer’s satisfaction

Optima Tax Relief gets 3.88 out of 5 stars from a total of 1,164 customer reviews on the BBB site. The reviews break down into two categories, very positive and very negative, with very few in between.

It’s important to remember that the BBB tends to attract negative reviews, as it’s a place where people traditionally go to complain when they are not satisfied.

Trustpilot

On Trustpilot, Optima Tax Relief gets 4.1 out of 5 stars from 3,116 reviews. 89% of the reviews are five-star or four-star, and 9% are one-star, with negligible percentages in between.

Here are some typical positive reviews.

Here are a few sample negative reviews.

Results on most review sites seem to follow a consistent pattern: large numbers of positive reviews mixed with a smaller number of highly negative reviews. Most customers who leave reviews seem satisfied, but when things go wrong they seem to go seriously wrong.

Some of the negative reviews may come from customers who have unrealistic expectations, but this is impossible to ascertain. If you’re considering retaining Optima Tax Relief you should be aware that while reviews are generally positive there is a minority who have had very unsatisfactory experiences.

The Bottom Line: Is Optima Tax Relief Right For You?

Optima Tax Relief is a legitimate tax relief company with an extensive track record. Some customers have left negative reviews, but that’s true of almost any tax relief company, and the number represents a relatively low percentage of customer reviews.

Does that mean that Optima Tax Relief is the right choice for you? Maybe, maybe not. Even the best financial services companies aren’t always the right fit for a given client. To find out, ask yourself these questions.

• How much tax debt do you owe? Optima Tax Relief won’t consider your case unless your tax debt is $10,000 or above.
• Does Optima Tax Relief provide services in your state? If you live in a state that is not served by the company you’ll need to look for another option.
• How complex is your case? If you have a straightforward problem – for example, if you simply need to ask for an installment agreement or an extension – you might be better off doing it yourself. If you are overwhelmed even thinking about dealing with it, professional help is probably a good idea.
• Have you considered local alternatives? A tax attorney or firm in your area might offer you a competitive package, and you’d have personal contact. If you’re not comfortable dealing with a remote service or working through online customer service, this could be a better option for you.
• Have you shopped around? Comparing several alternatives is always a good idea when you’re in the market for a financial service. There are other tax relief companies out there, and most offer a free initial consultation. Comparing several offers is always worthwhile.

If you answered “yes” to all of these, you might be a good fit with Optima Tax Relief.

Remember that this is a nationwide company with many clients. Your interactions are not likely to be personal. A free initial consultation may feel like a sales call, and during the process, you are likely to be interacting with customer service representatives, not the tax experts doing the work.

If this is a problem for you, you might be better off consulting a local business or law firm with a physical presence in your area.

How We Rated Optima Tax Relief

Tax relief is a unique financial service. No tax relief company can change the tax laws or compel the IRS to cancel tax debts. Tax relief companies can only work with existing laws and policies, and their main service is simply cutting through the masses of red tape and detail that characterize tax problems.

It’s important to assess tax relief companies according to realistic criteria. This is how we evaluated Optima Tax Relief.

• Effectiveness. No tax relief company can make tax debt go away, but Optima Tax Relief has a solid record of achieving as much relief as is legally possible in a given circumstance. Not all customers are happy, but that is true of almost all financial services companies.
• Availability. No service will help you if it isn’t available to you. Optima Tax Relief provides federal tax services in all but two states and state tax services in all but four, resulting in a high score in this category.
• Customer Service. When you’re dealing with a firm that delivers its services online, customer service is important. You need to know that you can reach someone when you have a problem, and you want to do it without fighting your way through masses of automated call centers. Optima Tax Relief gets generally good reviews on this score, but there are a substantial number of complaints about contact and service issues, dropping the score in this category.
• Price. Optima Tax Relief does not disclose its pricing formula online. Third-party reports suggest that services are not cheap, but are analogous to those of competing firms.

We’ll repeat the recommendation that you should shop around before choosing any tax relief company. Comparison shopping can get you a better deal and give you confidence that you’ve selected the best partner for your specific needs.

The post Optima Tax Relief Review 2024: Are They Legit? What Do They Cost? appeared first on FinMasters.

People with heavy debt loads often become desperate, making them prime targets for these scams. These fraudulent schemes charge fees without delivering results, leaving you no better off and potentially in a worse situation. Understanding the tactics of debt scammers is essential for protection. In this article, we’ll explore common scams and strategies to avoid them.

Breaking Down the Scams

There are several scams to watch for. Keep in mind that scammers may not always proposition you directly. They may put out very convincing, carefully crafted ads online or through social media promising relief services that inspire you to reach out for help.

A company isn’t legitimate just because it buys ads!

Debt Relief Scams

A company is claiming that they can get you out of debt by negotiating with creditors on your behalf. They promise that they can get your debts lowered or forgiven if you provide some personal information. They claim an impressive track record and present dramatic testimonials claiming that they reduced or eliminated debt for other clients. It sounds like a great deal, but it’s time to be careful.

These companies will charge you up front, take your money, then disappear without taking any action on your behalf at all. Some may “try” to get your debt reduced using very basic, inefficient methods just to be able to say that they offered services, even though they know their techniques are useless. Most of what they do (if they do anything at all) you could do yourself at no cost.

Auto Loan Scams

If you’re overwhelmed by car payments, companies that promise to help you work out a loan modification for your auto loan may seem appealing. These companies target people who are at risk for vehicle repossession. Unfortunately, the story is almost always the same. The victim will pay a fee to the scammer before realizing that the scammer has vanished into thin air. Some may stick around to try to extract more money from you under the guise that they are still “working on your case”.

Credit Repair Scams

Credit repair scams prey on your desire to build back your credit after encountering some financial hiccups. Scammers will often promise customers that they can remove legitimate negative information from credit reports. In reality, this is impossible to do.

Victims of these scams pay scammers money in the hopes that they can boost their credit scores and their access to credit. They end up discovering that their credit reports remain unchanged and their money is gone.

How to Spot #DebtRelief and #CreditRepair Scams

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Repairing damaged credit takes a long time and anyone who promises quick and easy solutions is probably a scammer. Instead of falling for credit repair scams you should focus on legal and effective methods of rebuilding damaged credit that actually work.

Telltale Signs of Debt Scams

While debt scammers can be subtle, they often display some red flags that are easy to catch if you know what to look for. Remember that you have every right to ask questions before you agree to work with a company. Any sense that you’re being rushed is a big red flag. Unrealistic promises are an even bigger red flag. Watch out for these tactics.

• The company contacts you. Most legitimate services do not initiate contact with potential clients.
• The company refuses to send you the specifics of the services being offered to you until you provide personal financial information. Scammers often want access to your bank account numbers, credit card numbers and available balances.
• The company asks you to pay fees ahead of time. This means you’re making payments before you’ve received any actual relief.
• The company tells you to stop communicating with creditors entirely.
• The company appears to use the same one-size-fits-all technique for every client. Real credit relief should be tailored for the needs of each person.

Some scammers may try to get you to pay upfront costs by saying that they are charging for “counseling” services for your debt. This is still a red flag. Legitimate counseling services will offer introductory sessions at no cost. Some scammers will present the upfront fees as “voluntary payments” to make it seem as though they aren’t pressuring you because they know you are likely to feel obligated to pay for services.

How Can You Avoid Debt Relief and Credit Repair Scams?

Awareness is the first step to avoiding scams. If you know they’re out there they are easier to spot.

Debt Relief

You don’t necessarily need help from a professional to try to get out of debt on your own. Here are some steps to take if you’re having difficulty with making debt payments:

• Learn about legitimate debt relief and debt settlement options.
• Decide whether you want to pursue debt relief on your own or seek outside help.
• If you decide to seek help, try a reputable credit counseling service first. Most offer free initial sessions so you have nothing to lose.
• If you decide to use a for-profit debt relief or debt settlement company, check the company’s reputation first.
• Ask for a written disclosure detailing all setup fees, service fees, maintenance fees, and any others.
• Look for information on legitimate companies using the National Foundation for Credit Counseling’s website.

There’s no easy road to debt relief, but facing facts and getting started will do you more good than falling for impossible promises!

Credit Repair

If your focus is on repairing your credit history, start by pulling your credit report for free once per year from each of the three main credit-reporting agencies (Equifax, Experian and TransUnion). You can get negative information removed from your credit report if that negative information is erroneous or inaccurate. You can do this yourself. Your credit report will contain instructions for filing a dispute. You can also open a dispute with the business that made the inaccurate report against you.

It is impossible to have a legitimate mark on your credit history removed. Anyone who promises that they can remove a legitimate negative item from your report is not being honest.

Credit reporting agencies do not need to have an original signed contract or any other such document, and you cannot get legitimate items removed from your report with a so-called “609 dispute letter” or any other magic trick.

Most negative information stays on your credit reports for seven years from the date that the account first became delinquent and was not subsequently brought up to date. Credit scoring models place more weight on recent information, so your negative records will have less impact on your credit as years go by.

In some cases, you may be able to petition your creditor to remove negative information from their reports tot the credit reporting agencies. You may be able do this by offering a payment in exchange for a deletion. If you’re unable to pay, you may be able to convince a creditor to retract the negative information as a goodwill gesture. The decision is entirely up to your creditor in both cases. There is no guarantee that the credit reporting company will remove any prior record of the account.

How Much Is Too Much to Pay for Debt Relief Services?

A company is not necessarily fraudulent just because it charges fees. Asking for a large amount of money is a sign of trouble, especially if the company wants payment upfront. The US Department of Justice, citing the Consumer Federation of America, says consumers should only be paying about $50 for setup fees. Maintenance fees for an ongoing account should not exceed $25^[1].

What Can You Do if You’ve Been Scammed?

What should you do if you’ve lost money to a debt scammer? If you encounter debt relief and credit repair scams, consider reporting the company. You can help to prevent scammers from harming anyone else. Always keep copies of your reports. If the scammer’s actions have created additional problems with your creditors the documentation may help you resolve them.

Here’s where to report your information.

• The Consumer Financial Protection Bureau (CFPB).
• The Federal Trade Commission (FTC).
• The attorney general’s office in your state.

You can also consider reporting a scam to your local police. This may not get you very far if the scammer communicated with you over the phone or the Internet. Companies that operate debt scams are not always located in the United States. This can make it very difficult for local authorities to track them down.

If you think you’ve been scammed, it’s important to check in with your creditors to see if any extra damage has been done. In many cases, scammers will advise their victims to stop making payments on their debt. This can mean that you’re even farther behind in payments than you realized.

If you’ve been targeted by one scammer, you’re likely to attract others. Your name and contact details may be on a database of potential targets. These lists are often sold to multiple scammers. Be aware and be careful.

If you provided personal information to a scammer, such as an account and credit card numbers, you may be at risk of identity theft. Consider placing a fraud alert on your credit reports (which you can do for free) or retaining a credit monitoring or identity theft protection service (which will cost money).

The Golden Rule

Avoiding debt and credit repair scams is not much different from avoiding any other scam. The golden rule still applies:

It may be nice to hear that someone can make your debt “magically disappear” if you pay a large upfront fee, but that doesn’t mean it will actually happen. It may not be so nice to hear that you’re going to have to cut your spending, try to increase your income, and apply a lot of discipline for quite a bit of time to get out of debt, but the person giving you that message is being much more honest and is much more likely to have your interests in mind. Sometimes the news you want to hear isn’t the news you need to hear!

The post How to Spot Debt Relief and Credit Repair Scams appeared first on FinMasters.

Debt settlement can help you break out of a desperate debt situation, but the process has serious drawbacks. It’s important to understand the debt settlement process before making a decision. In many cases, bankruptcy may be a better option.

Unfortunately, there are many dishonest companies in the debt relief industry, so it’s essential that you choose a provider carefully. To help you avoid scam artists, we’ve found the five best debt relief companies in 2024.

Required Reading: Debt Settlement: How It Works, Pros & Cons

Best Debt Relief Companies in 2024 Compared

Here are our favorite debt relief companies in 2024:

1. National Debt Relief – Best Overall
2. Freedom Debt Relief – Best For Credit Card Debt
3. Accredited Debt Relief – Best For Quick Results
4. JG Wentworth – Best for Customer Service
5. CuraDebt – Best for Tax Debt Relief

BEST OVERALL

National Debt Relief

• Prices: 15% to 25% of the enrolled balance
• Minimum balance: $10,000
• Allowable debts: Unsecured accounts
• Length of program: 24 to 48 months
• Approximate savings: 46% of the enrolled balance before fees; 25% after fees
• Founded in: 2009
• BBB Rating: A+
• BBB Score: 4.59/5 stars (1,617 Reviews)
• TrustPilot Score: 4.7/5 (35,979)
• Accreditations: AFCC, BBB

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BEST FOR CREDIT CARD DEBTS

Freedom Debt Relief

• Prices: 15% to 25% of the enrolled balance
• Minimum balance: $7,500
• Allowable debts: Unsecured debts
• Length of program: 24 to 48 months
• Approximate savings: Not disclosed
• Founded in: 2002
• BBB Rating: A+
• BBB Score: 4.36/5 stars (1,328 reviews)
• TrustPilot Score: 4.5/5 (37,895 reviews)
• Accreditations: AFCC, BBB, IAPDA

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BEST FOR QUICK RESULTS

Accredited Debt Relief

• Prices: 15% to 25% of the enrolled balance
• Minimum balance: $10,000
• Allowable debts: Unsecured debts
• Length of program: 12 to 48 months
• Approximate savings: 45% of enrolled balance before fees
• Founded in: 2011
• BBB Rating: A+
• BBB Score: 4.82/5 stars (240 Reviews)
• TrustPilot Score: 4.8/5 (4,382)
• Accreditations: AFCC, BBB

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BEST FOR CUSTOMER SERVICE

JG Wentworth

• Prices: 18% to 25% of the enrolled balance
• Minimum balance: $10,000
• Debt specialty: Unsecured debts
• Length of program: 24 to 48 months
• Approximate savings: 51% of the enrolled balance before fees
• Founded in: 1991
• BBB Rating: A+
• BBB Score: 4.25/5 stars (133 reviews)
• TrustPilot Score: 4.8/5 (4,283 reviews)
• Accreditations: AFCC, BBB

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BEST FOR TAX DEBTS

CuraDebt

• Prices: About 20% of the enrolled balance
• Minimum balance: $5,000
• Allowable debts: Unsecured debts; tax debts
• Length of program: 24 to 48 months
• Approximate savings: 50% of the enrolled balance before fees; 30% after fees
• Founded in: 2000
• BBB Rating: A+
• BBB Score: 4.81/5 stars (21 reviews)
• TrustPilot Score: 4.1/5 (11 reviews)
• Accreditations: AFCC, IAPDA

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National Debt Relief

Best Overall

Why We Chose It: National Debt Relief (NDR) is one of the most reputable debt settlement companies in the United States. Founded in 2009, it’s already received more positive reviews than almost all of its competitors. NDR averages nearly five stars on the BBB and TrustPilot and holds accreditations with the AFCC and the BBB.

In addition, NDR has a highly engaged customer service team. When customers encounter issues and leave complaints on review sites, NDR reaches out to rectify the situation within a few days at most.

NDR is also transparent about its prices and track record. It shares several examples of successful programs with real customers and discloses the average customer’s savings before and after fees. Those are approximately 46% and 25%, respectively.

How It Works: NDR specializes in debt settlement services, and its terms align with industry standards. You must have at least $10,000 in debt to sign up, and most unsecured debts are eligible, including credit cards, personal loans, and medical bills.

After applying, you undergo a free consultation with a debt expert, who will get more detail on your situation and discuss your options. Next, they’ll recommend a personalized debt settlement plan and monthly payment, subject to your approval.

If you decide to move forward, NDR aims to settle your debts in 24 to 48 months. You won’t pay anything until it settles with each of your creditors, at which point NDR charges 15% to 25% of the initial enrolled balance.

NDR works with customers across the country, but its services aren’t available in every state. Unfortunately, it doesn’t share which states it operates in, so ask about availability during your initial consultation.

Freedom Debt Relief

Best For Credit Card Debt

Why We Chose It: Freedom Debt Relief (FDR) is another top-tier debt relief company with an exceptional reputation. Founded in 2002, it has thousands of positive reviews on its BBB and TrustPilot pages. Its average rating is slightly lower than NDR’s but still well above four stars, and its customer service team responds to complaints quickly.

In addition, FDR has served over 850,000 clients since opening its doors, resolving more than $15 billion in debt. It also holds accreditations with the AFCC, the BBB, and the International Association of Professional Debt Arbitrators (IAPDA).

How It Works: FDR offers debt settlement services, but its terms are more flexible than others in the industry. Most notably, you may qualify with only $7,500 of debt, making them an attractive option if you fall just short of the typical $10,000 threshold.

FDR accepts most unsecured accounts, but it specializes in credit cards. That may indicate that they have closer relationships with card issuers than other providers, which could benefit you if you’re primarily struggling with credit card debt.

FDR’s enrollment process involves filling out an online application and scheduling a consultation with one of their specialists. They’ll help determine whether a debt settlement program could save you money.

If you agree to a program, FDR will try to settle your outstanding accounts in 24 to 48 months. As with NDR, you’ll only pay when FDR reaches an agreement with your creditors, and the fees range from 15% to 25% of the original enrolled balance.

FDR’s services are available in most states but not all of them, so you’ll have to double-check whether you’re eligible during your consultation.

Accredited Debt Relief

 Best For Quick Results

Why We Chose It: Accredited Debt Relief (ADR) is a well-established debt settlement company with a solid reputation. It started doing business in 2011 and has a nearly five-star average on its BBB and TrustPilot pages.

It’s received significantly fewer ratings than National and Freedom Debt Relief, but there are still thousands of reviews in total. In addition, ADR holds accreditations with the AFCC and the BBB.

ADR’s customer service team is also proactive about addressing problems its customers encounter. They consistently respond to what few complaints customers leave on their crowdsourced review pages within days.

Finally, ADR is transparent about the average customer’s approximate savings based on your initial debt amount – approximately 45%. However, it doesn’t disclose what you can expect to save after the company’s fees.

How It Works: ADR offers debt settlement services, and its terms are close to standard for the industry. For example, you must have at least $10,000 in unsecured debts for them to negotiate on your behalf.

However, unlike most of its competitors, ADR advertises that its programs can be as short as 12 months. If you want to get out of debt as fast as possible, it may be a better option than most, though there’s no guarantee you’ll see such quick results.

If you meet ADR’s requirements, you can apply online and schedule a free consultation with one of its debt specialists. They’ll review your finances and explore your debt relief options with you.

That includes the ADR program and its fee structure, which should sound familiar. In accordance with federal law, ADR won’t charge you until they reach a settlement with your creditor. At that point, its fees range from 15% to 25% of the enrolled balance.

ADR is another national debt relief company that doesn’t publicly disclose which states it operates in, so you’ll have to inquire about eligibility when you have your initial consultation.

JG Wentworth

 Best for Customer Service

Why We Chose It: In addition to creating an iconic jingle that’s been stuck in my head for 20 years, JG Wentworth is one of the oldest and most well-respected debt settlement companies in the United States.

Founded in 1991, it’s maintained a reputation for top-tier customer service for over three decades. It receives five-star ratings from thousands of people, replies to all negative reviews, and has accreditations with the BBB and the AFCC.

Many reviews praise JG Wentworth for going above and beyond to make customers feel safe and respected. You can keep the same representative throughout your journey and even communicate with them via text message.

JG Wentworth is also transparent about the realities of debt relief. It informs prospects immediately that creditors aren’t required to negotiate and that settlement is a last-ditch effort to avoid bankruptcy.

In addition, JG Wentworth shares that the average client saves 51% of their total debt balance through its program. However, that doesn’t include the company’s fees.

How It Works: JG Wentworth made its name purchasing structured settlements, converting consumers’ payments into a lump sum. It now offers debt settlement services.

If you have $10,000 in unsecured accounts, you can fill out an online application, and a representative will contact you for a free consultation. They’ll assess your eligibility and propose a debt relief program.

Should you accept, you’ll start making monthly payments into a dedicated account, and JG Wentworth will negotiate on your behalf. You can monitor your progress through an online portal and receive updates from your representative. Programs last 24 to 48 months, and fees are 15% to 25% of the initial enrolled balance, due upon settlement.

JG Wentworth’s services are unavailable in CT, GA, HI, IL, KA, ME, NH, NJ, OH, RI, SC, and VT. However, JG Wentworth will refer prospects from those states to law firms that provide debt relief services in their area.

CuraDebt

 Best for Tax Debt Relief

Why We Picked It:  CuraDebt has been in business for 23 years, opening its doors in 2000. It doesn’t have as many customer reviews as the other entries on this list, but the customers that leave comments tend to say good things.

CuraDebt has a nearly perfect rating on its BBB and TrustPilot review pages. It also holds accreditations with the AFCC and the IAPDA. It’s not accredited with the BBB, but the platform gives it an A+ rating.

CuraDebt isn’t as well-established as the other entries on this list, but it’s one of the only debt settlement companies to allow tax-related debts. If you want help navigating the unique challenges of settling with the Internal Revenue Service or your state tax department, CuraDebt may be your best option.

Learn More: When Should I Hire a Tax Debt Relief Company?

How It Works: CuraDebt offers debt settlement services for unsecured accounts and state or federal tax debts. You may qualify for a program with as little as $5,000 outstanding.

That makes CuraDebt more accessible than most of its competitors. However, if your debts are that low, you can probably use a less extreme method to meet your needs.

If you meet the requirements, you can schedule an initial consultation online. During the discussion, you’ll explore your financial situation and debt relief options with a counselor.

If debt settlement is your best option, they’ll create a program proposal for you. CuraDebt’s programs last between 24 and 48 months, save you roughly 50% before fees, and cost about 20% of your initial enrolled balance.

CuraDebt’s unsecured debt relief services are unavailable in CT, HI, ID, KS, LA, ME, MT, NH, NV, OR, SC, TN, UT, VT, and WV. Tax debt relief is unavailable in PA and PR.

Pros and Cons of Debt Relief Companies

If you’re drowning in debt payments that you can’t hope to afford, debt relief companies can sound like a much-needed lifeline. However, they have significant drawbacks that you must consider before you hire one.

Let’s explore the most notable pros and cons of debt relief companies to help you decide whether or not you should consider using one.

Pros of Debt Relief Companies

The only tangible benefit of hiring a debt relief company is that they’ll negotiate with your creditors for you. Theoretically, you can try to reach a settlement agreement with your creditors personally, but it’s often stressful, time-consuming, and challenging.

Outsourcing the work can save you time, energy, and mental stress. In addition, debt settlement companies have more experience in negotiation than you, and the best ones have good relationships with creditors. They might be able to reach an agreement faster than you could and achieve more favorable terms.

Cons of Debt Relief Companies

Unfortunately, there are many more downsides to hiring a debt relief company than advantages. The most significant ones include the following:

• Credit score damage: Debt settlement companies force you to stop making payments toward your debt, potentially for years at a time. Since payment history is 35% of your score, your credit will drop significantly. Settling an account for less than the outstanding balance also hurts your score.
• Exposure to lawsuits: When you default on a debt, there’s a chance your creditor or their debt collection agency could sue you to collect on the funds. Your debt relief company won’t be able to provide much assistance.
• Forgiven debts may be taxable: When you settle a debt for less than you owe, the absolved portion is taxable income. However, you don’t have to pay if your assets are less than your liabilities at the time. To figure out the tax repercussions of debt settlement, you may need to speak to a tax expert.
• Savings aren’t guaranteed: Debt relief companies won’t always reach a settlement agreement with your creditors. Even if they do, you might not save much money. Penalties and interest will continue to accrue on your debts, and relief companies charge you 15% to 25% of your enrolled balance.

Don’t let debt relief companies trick you into thinking that signing up for a debt settlement program is a magic bullet for getting out of debt. In reality, it’s expensive and high-risk, and you should only consider it as an alternative to filing bankruptcy.

Alternatives to Debt Relief Companies

Before you hire a debt settlement company or attempt to negotiate a settlement yourself, make sure you’ve exhausted all your other options. Of course, the best way to resolve your debt issues is to increase your net cash flow and pay them off in full.

Assuming you can’t solve your problems by tightening your budget or earning extra income, consider the following forms of debt relief next:

• Ask your creditors for help: Contact your creditors and ask them to help you pay them back. Reaching out, especially early, is a sign of good faith. They may have a hardship program that lowers your monthly payments or gives you more time to pay.
• Sign up for credit counseling: Credit counseling agencies are typically non-profit organizations that work with you to improve your finances. They also offer debt management plans, which involve your counselor negotiating with your creditors for better terms. However, they don’t have you stop making payments or settle your account for less than you owe, so they’re better for your credit.
• Execute a debt consolidation: Debt consolidation involves using a new credit account to pay off your existing debts. With a good credit score, you can consolidate your debts into a loan or credit card with more favorable terms.
• Consider bankruptcy. If you qualify for a Chapter 7 bankruptcy with no exposed assets, it can be a better option. The process can be over in six months, as opposed to two to four years for debt settlement. You can also discharge debts completely, instead of reducing them by 25% to 30%.

Each of the above options is more affordable than hiring a debt settlement company and does significantly less damage to your credit. Make sure you try to resolve your debt issues with them before resorting to a debt settlement company.

Learn More: What Is Debt Relief? How Does It Work and What Are Your Options

Are Debt Relief Companies Worth It?

Debt relief companies negotiate with your creditors on your behalf to settle your unsecured debts for less than you owe. Assuming you hire one that’s trustworthy, they can save you time, stress, and money.

However, the process damages your credit score significantly, and there’s no guarantee it’ll result in debt freedom. In addition, hiring a debt relief company to manage the process for you is expensive, and you may not save much money after paying their fees. Ultimately, you should only ever consider it as an alternative to bankruptcy.

FAQs

The post 5 Best Debt Relief Companies in 2024 appeared first on FinMasters.

In the end, though, it may end up worthwhile, as it can save you the headache of filling up forms, explore tax forgiveness, as well as negotiating for payment in installments.

Let’s find out just how much this professional tax debt relief company can help you.

Read our Optima Tax Relief review to get a full picture of their services and what they can do for you.

How Much Does Optima Tax Relief Cost?

Getting tax relief from a legitimate company like Optima isn’t free. But it doesn’t have to cost you an arm and a leg, either.

Ultimately, whether Optima is worth it depends on a few things:

• How big your tax bill is
• Whether your tax returns are filed and up to date
• The type of legal help you need (such as help for a tax lien or wage garnishment)

But after that, you move onto the Investigation Phase.

And that will cost you $295.

After you hand over the initial fee, Optima will get to work on your case. They’ll open up lines of communication with the IRS and start figuring out what your options are.

From there, how much more you pay depends on your situation. Here’s what you might expect.

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Getting Up to Date on Tax Returns

Here’s the first big question: are your tax returns filed and up to date? If your taxes are already up to date, you can breathe a sigh of relief.

If not, don’t panic.

You probably had a good reason for skipping past returns. Maybe you couldn’t track down some of your records or had a personal hardship.

Whatever the case, know these two things:

1. You CANNOT negotiate with the IRS to reduce your tax bill until your returns are filed and up to date
2. Optima makes it easy to fix the problem of unfiled returns

But there is a downside.

Getting up to date on your past returns isn’t going to be cheap.

Generally, costs can average between $2,000 and $5,000 to have Optima sort out your tax situation from start to finish.

Related Article: Pros & Cons of Working with Optima Tax Relief

Setting Up an Installment Plan

If you owe less than $10,000, you can probably get on the phone with the IRS to set up a payment plan all by yourself.

Quick Tip: Once you start an installment plan, you will have a harder time qualifying for a debt reduction request later.  We recommend you speak to an expert to see if you qualify for tax relief first.

You should definitely talk to a tax pro if you owe more than that because you might not qualify for debt relief from the IRS if you already have an installment plan.

If an installment plan is your best course of action, Optima will know.

Why not just do it yourself?

Because you might get a monthly payment you can’t afford.

You see… the IRS thinks anyone who owes that much in taxes must have a pretty good income.

But Optima knows the truth, and they’ll advocate on your behalf.

Negotiating a Settlement

Wondering how Optima might help you negotiate a settlement?

That’s a great question.

Firstnthey’ll negotiate a fair settlement to relieve you of your tax debt by making an Offer in Compromise.

Keep in mind that negotiating with the IRS can be tricky.

Even a seasoned tax expert will have to spend some time going back and forth to get you the best deal.

And more time can mean higher fees.

Instead of paying $2,000 to $5,000 for tax debt relief help, you may end up paying closer to $7,500.

But it also could mean higher savings.

One client review I read says the company reduced their $51,000 tax bill to $1,368.

So, instead of sitting around wondering if you’re doing the right thing, you can take a deep breath knowing the pros have got you covered.

Put a Stop to Garnished Wages and Tax Liens

Garnished wages and tax liens are a pretty big deal. When the IRS steps in to take your money or puts a lien on your property, you shouldn’t wait to take action.

Unfortunately, there are additional costs involved to stop wage garnishment or to remove a lien.

We’re talking about court fees.

The court has a filing fee for almost everything. You may have court fees on top of the $2,000 to $7,500 or more that Optima charges.

But there is good news!

No matter how dire the situation, Optima Tax Relief can help you find a way out.

They can even help you remove the lien from your credit report.

Is Optima Tax Service Worth It?

This is the million-dollar question.

So… is Optima Tax Relief worth it?

They sure are.

Because even with the average fees in the $2,000 to $7,500 range, Optima can save you money.

Calling Optima won’t make your tax troubles disappear, but one thing is clear: they’ll make dealing with the IRS a lot easier.

Get Tax Help Now

Learn what Optima Tax Relief can do for you

The post Cost of Optima Tax Relief Services – Is It Worth It? appeared first on FinMasters.

But here’s the thing: “What if you could get a fresh start with the IRS?” Instead of going further into debt, you could pay off what you owe using the IRS Fresh Start Initiative Program.

What Is the IRS Fresh Start Program 2024?

The IRS Fresh Start Program is how the IRS helps struggling taxpayers. The IRS created the program in 2011 and expanded its offerings in 2012, so it’s been around for a few years. It isn’t magic. You still have to pay your back taxes. But the Fresh Start Initiative can help you avoid:

• Interest
• Penalties
• Wage garnishments
• Tax liens
• Seizure of assets

The bottom line is, the program can help you get right with the IRS faster than you could before because it expands eligibility for a tax debt settlement. And do you know what that means? More flexible terms allow more people to qualify for help with their outstanding tax bill.

IRS Fresh Start Initiative Program Repayment Options

The IRS Fresh Start Initiative Program isn’t anything you haven’t heard about before.

What is the fresh start program with the IRS?

It includes three options:

1. An offer in compromise,
2. extended installment agreement,
3. and tax lien withdrawal.

“Essentially, it’s a combination of all these different options that people have available to them when dealing with the IRS,” said Sharif Muhammad, MBA, CPA, PFS, MST, and CFP®, and founder and CEO of Unlimited Financial Services, LLC.

Is it right for you?

It’s best if you owe the IRS $50,000 or less. You can take up to six years to pay your tax debt through monthly installments. Sometimes you can pay less than you owe. It’s called an Offer in Compromise (OIC). However, getting the IRS to agree to settle for anything but your full balance can be a challenge.

Offer in Compromise Mistakes:

Tax relief expert (and former IRS revenue officer) Jeffrey McNeal says when he processed offers, he saw tons of mistakes made on the forms, even when prepared by CPAs and enrolled agents!  So be sure to ask an expert for help.

An offer in compromise only comes into play if you’re down and out, for example, if you have very little assets, file bankruptcy, you’ve been laid off, or you’ve been incarcerated.

Sharif Muhammad

Finally, the last option is a tax lien withdrawal. But there’s a catch. It requires you to repay your entire tax debt through a direct debit installment agreement. Which is just like it sounds: “Your payments to the IRS come directly from your bank account.”

How Do I Qualify for the IRS Fresh Start Program?

You might think a Fresh Start IRS program that helps you get out from under your tax debt sounds too good to be true.

The IRS Fresh Start Initiative Program is the real deal!

There are a few requirements.

“The taxpayer must have filed all their required tax returns for the last three years and must be current with any estimated tax payments,” according to Canopy Tax.

You must also prove you can’t pay your tax bill in full and not be involved in an ongoing bankruptcy proceeding. The IRS doesn’t ask for much. The hardest part? If you’re behind on your past tax returns, getting up to date might not be easy. Otherwise, it’s a straightforward process. Hopefully we answered your question of, ‘How Do I Qualify For The IRS Fresh Start Program?’

What if You Owe a Substantial Amount in Back Taxes?

Many things can come into play when you owe a substantial amount in back taxes.

If you ignore the IRS or you’re not responsive to them reaching out to you, the IRS can garnish your wages, put a lien on your home, or file a federal tax lien against you.

Sharif Muhammad

There is hope. Setting up a payment plan can stop the collection action.

If you’ve been paying in good faith, but you hit a snag somewhere, the IRS can grant you a non-collectability status and give you a reprieve for a short period of time.

Sharif Muhammad

Plus, according to Canopy Tax, “The IRS Fresh Start Programs allow the IRS to withdraw a lien if the taxpayer has entered into a Direct Debit Installment Agreement.” Basically, it gives you some breathing room.

Quick tip: Once you start an installment plan, you will have a harder time qualifying for a debt reduction request later.  We recommend you speak to an expert to see if you qualify for tax relief first.

IRS Fresh Start Program Reviews

We spent hours reading posted results from the IRS fresh start program initiative 2020. Based on customer IRS fresh start program reviews, the best we can say is, ‘You have a chance!’

One Reddit IRS Fresh Start Program Review claimed with quite a bit of documented evidence that they were able to save $27,000 thanks to the fresh start IRS initiative.  Generally, the IRS fresh start initiative reviews tell of a lot of hard work and time if you choose to do-it-yourself but whether you choose a professional or go it alone, you may save thousands of dollars.

What’s Next?

If you owe tax debt, understanding your options and dealing with the IRS isn’t easy. Even with programs like Fresh Start, you might not want to do it alone. Don’t worry. There are professional tax debt relief companies that can help you every step of the way. Most offer a free consultation. That way, you can decide if it’s right for you before you fork over any of your hard-earned cash.

Whether you settle your tax debt yourself or seek professional help, one thing is for sure: “Putting it off will only make it worse.” It’s best to confront your tax debt head-on. Understand your options, ask a professional tax pro for help, and make a plan to put it all behind you.

The post How to Settle Tax Debt with the IRS Fresh Start Program appeared first on FinMasters.

Important Note: Don’t expect a tax relief company to make your tax debt vanish. They aren’t magicians. They will assess your situation, reduce your arrears as much as possible, and try to set up an affordable payment plan for the balance of your debt. Expect help, not miracles!

Best Tax Relief Companies

We selected the companies below based on a number of criteria. We looked for companies that offer free consultations, have been in business for at least five years, and had no complaints filed with the FTC. We also looked at the types of services offered, their costs and customer satisfaction.

BEST OVERALL

Optima Tax Relief

Optima Tax Relief offers a wide range of tax services, including audit representation and state taxes. They have excellent customer reviews and a strong record of success. This is a thoroughly professional tax relief company. Learn More

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BEST GUARANTEE

Anthem Tax Services

Anthem Tax Services offers a range of payment plans and the most comprehensive guarantee in the business. Reviews are solid, and the Company is accredited by the National Association of Tax Professionals and the National Association of Enrolled Agents. Learn More

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BEST RANGE OF SERVICES

Community Tax

Community Tax offers a wider than usual variety of service options, including tax resolution, tax preparation, ongoing tax assurance, and general accounting. They handle tax debts as low as $7500. Learn More

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BEST PAYMENT OPTIONS

Precision Tax Services

Precision Tax Services offers a strong guarantee and a choice between a lump-sum payment and zero-interest financing. It’s a strong all-around option for federal tax debt. Learn More

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BEST FOR SPANISH SPEAKERS

Tax Defense Network

Tax Defense Network offers a solid range of services and is a good choice for any client. They are particularly useful for Spanish-speaking clients, as they offer fully bilingual services. Learn More

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1. Optima Tax Relief

Optima Tax offers a strong all-around suite of tax relief services backed by a staff of specialist tax attorneys, CPAs, and enrolled agents. They offer a convenient app along with online services. Optima claims to have resolved over $1 billion in tax debt to date.

Features & Benefits

Why get tax relief through Optima? Here are just a few reasons they’re one of our favorites:

• A+ BBB rating
• Handles both Federal and State tax debts
• Tax attorneys on staff
• 2 to 6 month turnaround time
• $10,000 minimum tax debt requirement
• Free consultation
• 15-Day Money Back Guarantee (for initial investigation phase)

Optima has a three-step process for completing your agreement with the IRS.

• Consultation. Optima’s staff will review your case and describe your options.
• Investigation. Optima will initiate client protection, communicate with the IRS, and review your options.
• Resolution. You will establish IRS compliance and achieve the best available resolution.

Do not expect your tax bill to vanish: this is the IRS, and they don’t go away. Optima will work to reduce your tax liabilities and set up a payment plan that you can afford.

Optima will give you a detailed explanation of your options, the resolution you can expect, and what it will cost before you pay any fees.

Customer Reviews

Optima has over 2,886 reviews on Trustpilot. Their overall rating is 4.6 out of 5 stars, and 79% of their reviews are 5-star.

They have an A+ rating with the BBB with a score of 4.41 out of 5 stars from 2,231 customer reviews.

Costs

Optima’s initial investigation fee starts at $295.00.

Once they complete their investigation, they will tell you how much the final cost will be and which route they will take to obtain your agreement with the IRS.

While actual costs aren’t disclosed, based on customer reports, you can expect to pay between $2,000 and $5,000 for the total costs.

Initial Costs: $295.00 Investigation Fee
Average Overall Costs: Between $2,000 and $5,000

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Want to learn more? Read our full Optima Tax Relief review.

2. Anthem Tax Services

Anthem Tax Services handles both individual and state taxes for individuals, businesses, and corporations. They provide bookkeeping and tax preparation services as well as tax debt relief. They can help with tax liens, levies, garnishment, and unfiled taxes.

Anthem will assess your tax problem in a free consultation. They will tell you what they can do to help you and describe the best resolution target.

Anthem stands out for a money-back guarantee that has no time limit. If Anthem cannot reduce either your total debt or your monthly payment, they will refund your money.

Features & Benefits

Why get tax relief with Anthem Tax Services? Here are just a few reasons they’re our favorite:

• Low Starting Costs
• Payment plans available
• Great Customer Service
• Top guarantee

Anthem Tax Services is licensed in every state in the US.

Customer Reviews

On Trustpilot, Anthem Tax Services have an average 3.0 rating from 81 reviews. 67% of the reviews are 5 stars.

Anthem has an A+ rating with the BBB. They have 187 reviews with an average rating of 4.4 out of 5 stars.

Costs

Anthem Tax Services charges an initial fee as low as $250, one of the lowest in the business. Your total fee will be based on the details of your case.

Once Anthem completes its initial evaluation, it will tell you how much the final cost will be and which route it will take to obtain your agreement with the IRS.

While actual costs aren’t published, you can expect to pay between $2,500 and $4,500 for the total process.

Initial Costs: As Low As $250.00
Average Overall Costs: Between $2,500 and $4,500

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Want to learn more? Read our full Anthem Tax Services review.

3. Community Tax Relief

Community Tax Relief offers tax debt resolution, back tax relief, tax planning, tax return preparation, and bookkeeping and accounting services. They offer an ongoing tax assurance program through a mobile app, which can help you stay out of tax trouble.

Community Tax Relief is an IRS-approved continuing education provider. Their website holds an extensive range of tax education materials, which are available even to non-customers.

Features & Benefits

Why get tax relief through Community Tax? Here are just a few reasons they’re one of our top options:

• A+ BBB Rating
• Personalized Negotiations
• Tax Education Resources
• $800 Million In Tax Debt Resolved
• Tax Assurance Program

Community Tax also has a 3 step process for getting you on your way to being free of tax debt.

• Consultation. You’ll get a free review of your problems and potential resolutions.
• Investigation. Community Tax will request your records from the IRS and fully assess your case.
• Resolution. Community Tax will prepare a resolution proposal for the IRS.

Community Tax charges a single flat fee. This will be quoted after the Investigation stage.

Customer Reviews

Community Tax has 539 reviews on Trustpilot. The average rating is 4.0 out of 5 stars, and 82% of the reviews are 5-star.

The Company is accredited with the BBB with an A+ rating. There are 229 reviews on the BBB site, with an average of 4.31 out of 5 stars.

Costs

Once Community Tax completes its investigation, it will tell you how much the final cost will be and which route it will take to obtain your agreement with the IRS. While actual costs aren’t published, you can expect to pay between $2,500 and $4,500. This may vary with the size and complexity of your case.

Average Overall Costs: Between $2,500 and $4,500

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Want to learn more? Read our full Community Tax relief review.

4. Precision Tax

Precision Tax Relief is an established company with an excellent reputation and a solid range of services for both individuals and businesses. They are focused on the IRS and do not handle state tax issues.

Precision charges a single flat fee. That won’t change unless new information appears that you did not present in your initial consultation. You can make a single payment or choose a zero-interest financing plan

Features & Benefits

Precision tax is a top all-around contender in the tax relief space. Here’s what they offer:

• A+ BBB Rating
• 30-day money back guarantee
• Customer service by phone, text, email, and chat
• Zero-interest payment plans available
• Exceptional range of services
• Over $58 million in tax debt settled

Precision tax does not offer tax audit representation or state tax issues.

Customer Reviews

Community Tax has 1,629 reviews on Trustpilot. The average rating is 5 of 5 stars, and 98% of the reviews are 5-star.

The Company is accredited with the BBB with an A+ rating. There are 29 reviews on the BBB site, with an average of 4.97 out of 5 stars.

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5. Tax Defense Network

Tax Defense Network is an established company with a solid reputation. They serve individuals and small businesses and are noted for providing fully bilingual customer service. Their website is available in English and Spanish.

Tax Defense Networks offers a wide range of tax education materials and calculators on its site. They are available to non-customers.

The fee will be a flat rate based on the complexity of the case. Typical fees range from $2500 to $3500, on the low side for tax relief companies. The refund request window is only three days.

Features & Benefits

Tax Defense Network offers a solid and affordable package whether you speak English or Spanish. Here’s what to expect.

• A+ BBB Rating
• 3-day money back guarantee
• Tax preparation and audit defense
• Flat rate fees, minimum of $10,000 in tax debt
• Financing options
• Bilingual service

Tax Defense Network handles both state and federal taxes, including payroll taxes.

Customer Reviews

Community Tax has 244 reviews on Trustpilot. The average rating is 4.1 out of 5 stars, and 76% of the reviews are 5-star.

The Company is accredited with the BBB with an A+ rating. There are 850 reviews on the BBB site, with an average of 4.52 out of 5 stars.

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How Much Does Tax Relief Cost?

For the tax relief industry, this is a pretty hard question to answer because most companies aren’t very open with their pricing structure.

This can seem very shady at first glance. However, keep in mind that most companies are wary about giving set prices because they aren’t sure exactly which techniques or processes they will need to take for your specific situation.

That said, most tax relief companies offer a free consultation and generally charge between $250 to $450 to start the initial investigation phase.

Once that process is complete, you will get your final pricing, and from what we have found, these final prices can range from $2,000 to $5,000.

How Long Does Tax Relief Take?

On average, you are going to see it take between two to six months for a tax relief firm to negotiate with the IRS, depending on the specific challenges and complexities of each case.

This seems to be the standard with most of the companies we looked into. The exact duration will depend on what type of work needs to be completed on your account.

Can The IRS Seize My Assets For Back Taxes?

The simple answer is ‘Yes.’ IRS can seize your assets for back taxes if you ignore the situation. They can make your life really hard with things like:

• garnishing your wages
• freezing your bank accounts
• taking your home
• taking your car
• closing your business
• taking other personal property

Ignoring the IRS is never a good idea. Getting on a payment plan or getting tax relief help is your best option because the alternatives really will ruin your life.

Do I Qualify for Tax Relief?

Figuring out if you qualify for tax debt relief is left up solely to the IRS.

This is why you should only deal with a company that will give you a free consultation. During this process, the company should be trying to figure out if you will meet the IRS requirements to qualify for some sort of tax relief.

Usually, if you owe more than you can afford, you can employ a tax relief firm. However, you must be 100% up to date on your yearly tax fillings.

Should I Negotiate With the IRS on My Own?

In all honesty, your first option should always be to try to negotiate on your own; however, there are situations where going at it alone could hurt you more than help you.

It’s best to do your research and weigh the pros and cons of each action.

Will it cost you more in time and money if you do it alone, or will it cost you more if you hire a firm to help you?

The IRS might seem scary, but they function like any business and would rather have you pay what you can afford than get nothing at all.

The only difference is that they can take everything you own to cover what you owe. Whatever you decide, just don’t ignore them.

Taking Action

There is no reason to only look at just one company when trying to get help with your tax debt. You should try multiple companies to see which one can offer you the lowest rate possible for the maximum amount of work. All it takes is a bit of time and a few phone calls.

A good starting point will be first to try the companies on our list since we have already narrowed down the selection for you. These are the best companies offering tax debt relief services out there at the moment.

And remember, the faster you get tax relief, the sooner you can move on with your life.

The post 5 Top-Rated Tax Relief Companies in 2023: Expert Reviews and Comparisons appeared first on FinMasters.

But what if you also have unfiled returns?

Taking care of that is a little more complicated. Here’s why: Eventually, the IRS will make you a priority. When that happens? It won’t be pretty. And the IRS won’t talk to you about payment options unless your taxes are filed and up to date. Instead, you might be looking at a tax lien or wage garnishment.

If You Don’t File Taxes

If the IRS requires you to file taxes and you don’t, what happens? “If you owe the IRS and don’t file taxes, you get charged a failure-to-file penalty,” said Sharif Muhammad, MBA, CPA, PFS, MST, and CFP®, and founder and CEO of Unlimited Financial Services, LLC.

The penalty for not filing is 5% for every month you’re late. Although, the most the IRS can charge is 25% of your unpaid taxes. Let’s say you owe $10,000 in taxes. Filing 5 months late will balloon your tax debt to $12,500.

The IRS also has the option to complete a substitute return. A substitute return is where the IRS files a return on your behalf. But there’s a problem. The IRS might not have all the info. All of those deductions and tax credits you qualify for? If the IRS doesn’t know about them, your tax bill could be higher than if you did your return yourself.

If you get a substitute tax return, “you can file your own version to replace what the IRS put together,” said Muhammad. But if you don’t respond to the IRS about the substitute tax return, they’ll start the collection process.

What If You Haven’t Filed for Several Years and Owe Back Taxes?

If it’s been a few years since you filed taxes, don’t panic. But don’t keep putting it off. Now is an excellent time to seek professional tax advice. Why? You need to figure out how many years back the IRS wants you to go to catch up on back returns. Their policy requires you to go back for six years.

Quick tip: Once you start an installment plan, you will have a harder time qualifying for a debt reduction request later.  We recommend you speak to an expert to see if you qualify for tax relief first.

But they sometimes settle for less. Either way? Trying to get caught up on filing old tax returns is no walk in the park. Plus, there are penalties and interest charges that accumulate for all those years you didn’t file and didn’t pay, and this resource may help you if you have an IRS debt that’s 1, 2, or 3 years old. When it comes to getting paid, the IRS is ruthless. A professional, like a tax debt relief company or CPA, can protect you financially and get you the best outcome possible.

How to Get Caught Up on Unfiled Taxes

Filing taxes is like going to the dentist. You might not like it, but it’s got to be done. Getting caught up on unfiled taxes is similar to if you haven’t gone to the dentist in a few years. You probably have a few cavities and might need a tooth or two pulled.

In other words? It isn’t as easy as if you’d done it on schedule. But it’s possible. Whether it’s been a year or two or ten, you need your wage and income information.

Do you have your old W2s, 1099s, and IRA contribution info tucked away in an old shoebox somewhere? If you do, you’re one step ahead.

If not? The IRS has that information available. Get your identifying information together, such as your Social Security number, date of birth, filing status, and mailing address from your latest return. Then request your records online or by mail.

One thing to note. The IRS calls this information “transcripts.” So when you go to request your information, you’ll see the page that says, “Welcome to Get Transcript.” You’re in the right place.

Tax professionals have access to your tax information too, we can download the information and prepare a return for you.

Sharif Muhammad

Imagine – getting up to date on your tax returns without all the stress? Sounds pretty good. Keep in mind that filing unfiled tax returns is crucial. If you don’t? The IRS won’t negotiate payment options for your tax debt.

Payment Options for Your Tax Debt

Before talking to the IRS about payment options, consider reaching out to a professional. Turns out, when it comes to taxes, there’s a lot you might not know. When a person tries to settle tax debt themselves, “they tend to give up too much to the IRS or don’t take advantage of all the options available to them,” said Muhammad. “They might not know they can negotiate certain penalties to get their tax debt reduced.”

There’s also the option of doing a payment plan. That’s where you set up installment agreements to pay on your tax debt over time.

What about tax debt forgiveness? You might have heard about settling tax debt for pennies on the dollar. The problem? It happens less often than you might think. It’s called an offer in compromise and “only comes into play if you’re down and out,” said Muhammad.

If you are laid off, have minimal assets, are filing bankruptcy, or have been incarcerated, that’s when the IRS is most likely to agree to an offer in compromise. Otherwise, a payment plan is usually your best bet. If you’re not sure what your options are, reach out to a tax pro.

Most tax debt relief companies offer a free consultation. At the very least, you could get a little guidance and not feel so overwhelmed by owing the IRS and dealing with unfiled tax returns.

The post What If I Owe the IRS But Have Unfiled Tax Returns? appeared first on FinMasters.

If you owe money to the IRS and have looked into the best tax debt relief companies, you’ve probably heard about Optima Tax Relief by now and are wondering if they’re really legit.

Read our Optima Tax Relief review to get a full picture of their services and what they can do for you.

On the surface, they look good.

They seem to be one of the only tax relief companies getting consistently great reviews and good press.

For example, Optima boasts the following:

• 5-star average rating on Supermoney.com
• Ranked #1 in the financial services community by INC 500
• A+ rating in BBB

 So, here’s what we did for you:

We went out and searched for reviews of Optima Tax Relief to find out what the actual reviews are saying.  We searched for the good, bad, and ugly. We left no stone unturned – and even looked at reviews on Ripoff Report to get the full picture.

In summary, we found that Optima Tax Relief has (by far) the best reviews of any tax relief company we could find online.  Their employees also rave about working there. But we also found some critical reviews, especially on Ripoff Report.  There’s a story behind every good and bad review, but we’ve done our best to show you:

• What actual clients say about Optima (positive and negative)
• Optima’s ratings & reviews at BBB, Trustpilot, Glassdoor, and more
• How Optima stacks up against their competitors

Let’s dive in with employee reviews.

You always know what you’re going to get when you go to complaint sites… you’re gonna get complaints. But you can gain some great insight into a company by seeing what their employees say.

Glassdoor Reviews of Optima Tax Relief

Reading Glassdoor reviews can give you an inside look at the company. Current and former employees use the site to leave their anonymous opinion about what it’s like to work there.

After all, wouldn’t you want to hire a company that treats their employees with respect?

The company has 4.4 out of 5 stars on Glassdoor, based on 494 anonymous reviews. 88% would recommend Optima to a friend, and a whopping 93% of reviewers approve of the CEO.

Here’s what else employees say about working at Optima:

I have been working at Optima Tax Relief full-time (More than 3 years). Excellent Pay! Benefits and a Happy Healthy Atmosphere to be a part of.

A Senior Tax Associate

Optima has an amazing work culture; the company is always striving to boost office morale. Optima believes in keeping their employees happy so that they can keep the clients happy.

A Resolution Specialist

They really like to promote within, lots of company events, Great CEO, great atmosphere

A member of the Documents Associate Team in California

Let’s move on to BBB.

BBB Reviews of Optima Tax Relief

The Better Business Bureau has accredited Optima since 2012. The BBB has even given them an A+ rating, which is the highest rating a company can get.

Now to frame Optima’s success on BBB, we need to start by saying that BBB (like Yelp or Ripoff Report) is largely a place where people go to leave complaints rather than compliments.

It’s very common for a company to have MORE complaints than reviews.

For example, Anthem Tax Services, another popular tax relief provider, has 191 total reviews on BBB but has 97 complaints. In other words, they have about 1.9 complaints for every 1 review.… And Anthem is a solid company.

Comparatively, Optima blows Anthem away.

As for Optima’s customer reviews, they have 4.38 out of 5 stars based on over 2,110 reviews. They also receive almost 4x as many reviews as complaints.

Here’s a couple of great reviews Optima received on the BBB site:

Length of time from start to finish is quite long. Anxiety grows as agents work on the case. Agents are very responsive to calls, email & faxes. Outcome was very good.

Joyce

They are truly the best. I was one of those thinking ok, ok – I hear the radio commercials, but are they really going to help me? I will have to say after a few months, I can say they have, thanks to the entire team.

dah0301

Optima also has some critical reviews, but if you read them, you’ll see that many of the clients came to Optima with unrealistic expectations.

For example, one user complained that he hired Optima to reduce the amount he owed the IRS, but Optima was unsuccessful, and now he owed more to the IRS than before, since interest and penalties had been incurred.

This is the typical complaint against Optima.

But to be fair, Optima states on their website that they are not able to guarantee a reduction in what clients owe the IRS.  They can help you get your ducks in a row (such as getting current on unfiled taxes and filing the necessary forms to the IRS), but they can’t guarantee you’ll always end up getting a reduction.

Tax debt relief isn’t magic. No company can simply make debts to the IRS go away.

It’s very common for people to mess up the filing, and that’s why you go to a company like Optima.

So our recommendation is that if you do business with Optima, you understand what they’re good at doing as well as their limitations going in.

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Ripoff Report Reviews of Optima Tax Relief

Ripoff Report is a privately-owned website that’s been around since 1998. The reviews are uncensored and anonymous.

The site doesn’t ask for anything but an email address to leave your opinion, which can make the reviews a little controversial.

Plus, Ripoff Report doesn’t look into any of the claims – so there’s no telling if the reviews are real or not.

But, all that aside, here’s what people are saying about Optima on Ripoff Report:

Optima Tax Relief is a ripped off. I pay 500 dollars for the first step, and they do anything for me. I owe IRS 12000 dollars and they did not decrease my payment.

A review from 2019

Optima Tax Relief had me pay them 1000 dollars and did nothing for me.

A review from 2014

We’re not dismissing Optima in this review, but the only thing you’re going to find at Ripoff Report are negative comments.  I think it’s better to go to a company like BBB to get a better picture of what’s really going on. The vast majority of users are happy with Optima’s service.

Optima Complaints: Are They a Rip Off?

There are a lot of tax scams out there. That’s why it’s essential to read online reviews! But here’s the kicker: Make sure you’re getting reviews from a reputable site.

Some sites let anyone leave a review. That’s why the BBB is so powerful… They connect reviewers with the company to help them resolve any problems.

Here’s one example:

Aaron D gave Optima a one-star review on the BBB site:

Do not use this company! They are crooks. Soaked me for over 13k, over five years. I spent a week and got on a payment plan with the IRS myself! Optima was fired yesterday! They wanted another 5k out of me. No, I don’t think so. If you want me to remove this BBB review, then refund every dollar is spent, and I’ll consider it.

Aaron D

But Optima tried to help Aaron. Here’s their response:

Upon receiving your review, we’ve been diligently trying to locate you in our system, but your review didn’t provide enough identifiable information to locate you. We welcome you to call (800) 965-3192 to speak with one of our QA Specialists, whenever you are ready. We will be more than happy to speak with you directly about your concerns. We truly hope you provide us with an opportunity to turn your experience around, and we are looking forward to hearing from you.

Optima Tax Relief

Quick Tip: Once you start an installment plan, you will have a harder time qualifying for a debt reduction request later.  We recommend you speak to an expert to see if you qualify for tax relief first.

Trustpilot Reviews of Optima Tax Relief

Trustpilot is another online review site that you can count on. So, what do they say about Optima Tax Relief?

For starters, Optima has 4.6 out of 5 stars from 2,599 reviews on Trustpilot.

Optima Tax Relief did an amazing job making sure my tax issues were solved correctly.

Ashley

Even though Robert gave Optima just one star, here’s what he had to say:

I’m very pleased with the results of what they have done for me. I would recommend them to anyone that needs help with tax problems.

Robert

And Jamario was pleased, too. Here’s what he said:

It was a lot of steps, but overall they were consistent and helped me with everything I needed help with.  Thanks, Optima Tax.

Jamario

The Verdict: Is Optima Tax Relief Legit?

If you owe the IRS, you need a way out. Instead of letting the worry and anxiety ruin your life, try a free consultation with Optima Tax Relief. There’s no obligation, so there’s nothing to lose.

They won’t be able to fix your problem overnight. They can’t guarantee that your tax debt will be reduced (nobody can).

But they’ll give you peace of mind and work to get your tax issues resolved when you’re in over your head in debt to the IRS.

Get Tax Help Now

Learn what Optima Tax Relief can do for you

The post Is Optima Tax Relief Legit? Trustpilot, BBB, & Glassdoor Reviews appeared first on FinMasters.

If you have $10,000 to $15,000 of IRS tax debt and aren’t sure where to turn, this article is for you.

Most tax debt articles won’t give you all your options.

(They just want to pitch a tax relief company!)

This is NOT one of those articles.

We’ll look at all your best tax relief options to pause IRS collection activities immediately, including applying for debt forgiveness (Offer in Compromise), setting up a payment plan (Installment Plan), bankruptcy, and considerations for doing it yourself (DIY) or seeking help from a tax relief company.

You’re here because you already know that the IRS can garnish wages or file a tax lien on your property. You owe money to the IRS, and it’s reached the point where you need to act.

By the end of this article, you’ll be ready to make a decision about what tax relief option suits you best and whether you should proceed on your own or choose to hire an expert to help.

The Big Problem Owing $10,000 to $15,000 (And 4 Solutions)

Here’s the brutal truth about having $10,000 to $15,000 of IRS tax debt.

But they have no idea what’s going on in your life that makes forking over, say, $13,000 close to impossible.

Fortunately, there are tax relief options to get the IRS off your back and end your tax problems.

• Set up an IRS payment plan
• Apply for an offer in compromise
• See if you qualify for a temporary delay in collection, disaster relief, or innocent spouse relief.
• Find a way to pay

Let’s take a closer look at some ways to pay back the IRS.

Setting Up an IRS Payment Plan

It’s true that you probably don’t have $11,000 or $12,000 laying around to pay back the IRS in a lump sum.

Give yourself a break.  8% of all U.S. taxpayers are delinquent.  You are not alone!

The good news is that the IRS allows you to set up a payment plan, known as an Installment Agreement. You can use IRS Form 9465 to apply for an installment agreement.

Installment plans let you pay over up to 72 months (6 years).

Installment Plan Sample Monthly Payments

Here are some sample monthly payments, including the qualifications for each and the forms needed.  If you cannot afford these payments, you should skip to the next sections to see your other options.

*Monthly payment is an estimate only and does not include an up-front application fee.  The IRS accepts a high percentage of installment plan requests, but acceptance is not guaranteed.  We highly recommend you speak to a tax expert from Optima Tax Relief prior to entering into an Installment agreement or if you cannot afford the monthly payments above.

Please note that interest and penalties can add up fast, pushing your balance into a higher category.  For this reason, we have also created a guide for you showing you how to get out of tax debt if you owe $16,000 to $25,000 to the IRS.

Benefits of Setting Up an Installment Agreement

There are several benefits to an installment agreement.

• Manageable monthly payments.
• Stress relief: the IRS won’t bother you as long as you make your payments.
• Pauses IRS collection attempts.

Just be aware that if you enter into an installment agreement and then have difficulty paying them on time (if you default), the IRS is notorious for demanding the full balance you owe or filing tax liens and IRS levy actions. This may be one reason to try to offer them a lower amount than what you owe them.  (Offer in Compromise)

Quick Tip: Once you start an installment plan, you will have a harder time qualifying for a debt reduction request later.

IRS Payment Plan Qualification and Setup

Acceptance of your installment plan is not guaranteed.  You need to be up to date on all tax filings and other taxes owed, and you must not have already requested an installment agreement in the past 5 years.

If the IRS decides that you can pay your taxes in full, they will not approve the request.

You will use Form 9465 to apply.

Expect to pay between $31 and $225 in setup fees, depending on whether you set up a direct debit from your bank or pay by check and whether or not you use their online application.

The absolute cheapest way to go is to use an online payment agreement (OPA) application at IRS.gov/OPA and set up a direct debit, which only costs a one-time $31 setup fee. Even this fee can be waived for lower-income applicants).

Who is a Good Candidate for an Installment Plan

If you sincerely cannot pay the full lump sum, you are a good candidate for an installment plan.

(There’s a difference between “cannot pay” and “don’t want to pay” )!

Whether your tax debt was incurred in the most recent tax year, or you owe years and years of back taxes, even if you’ve had your wages garnished or the IRS has a tax lien on your property, the installment plan could work for you.

If You Choose an Installment Plan

If you owe $10,000 to $15,000 to the IRS and you choose an installment plan, the installments will be a significant addition to your debt load. You will have to prioritize them over all other debts. Other creditors may push you harder, and their demands may be louder, but none of them can do what the IRS can do.

In a worst-case scenario, remember that many other debts can be discharged in bankruptcy. Tax debts usually cannot be.

The installments will be a burden, but you will need to pay them.

Settling Your Debt for Less if You Owe the IRS $10k-$15k

The first thing most people who have over $10,000 in tax debt want to do is see if they can get the debt forgiven.

An offer in compromise is an offer to settle with the IRS for less than the amount you owe them.

This can work, but it’s far from a sure thing. The IRS accepts only about 40% of the applications it receives for Offers in Compromise.

The IRS will only accept an offer in compromise if they believe that you don’t have the capacity to pay the full amount and that trying to collect from you would be a waste of their time and resources.

This is not about negotiating. The IRS will review your income, assets, and expenses and decide what they think you are able to pay.

But Will You Qualify?

The Offer in Compromise sounds like a dream come true.

The trick is qualifying. It may not be easy. For the 24,000 offers the IRS accepted in 2018, the IRS received 59,000 offers.  In other words, they accepted about 41% of the offers.

The IRS will not accept an Offer in Compromise if they believe you can pay the debt in a lump sum or by payment plan.

In order to qualify, you must offer the IRS an amount equal to or greater than what the IRS calls “the reasonable collection potential.” (RCP). That’s a complicated way of saying you need to offer them whatever they think they can squeeze out of you based on your assets such as your home, cars, investments, and savings, etc.

The good news?

If you’ve got few or no assets and/or very heavy debt, there’s a good chance your offer will be accepted.

Other Options

There are several other possibilities for reducing tax debts.

• Disaster victims. If you have suffered economic loss due to a natural disaster, you may qualify for tax relief in disaster situations.
• Innocent Spouse Relief. If you filed a joint tax return and you have tax liabilities due to the actions of a spouse or ex-spouse, you may qualify for Innocent Spouse Relief.
• Temporary Collection Delay. If the IRS concludes that you have no way to pay your taxes, you may qualify for a temporary collection delay. You will still owe the amount, and it will incur interest. If your financial situation improves, you will have to pay.

They apply to limited numbers of people, but you should still be aware of them because one of them could apply to you!

Making an Offer On Your Own VS. Hiring a Tax Relief Company

In order to apply, you must fill out IRS Forms 656, Offer in Compromise, and 433-A, Collection Information Statement for Wage Earners and Self-Employed Individuals, or Form 433-B if you own a business.

There’s also an application fee, which the IRS recently increased to $205, effective April 27, 2020.

You can file the forms on your own, but the forms are long and cumbersome and must be filled out perfectly.

Common Offer in Compromise Mistakes

Tax relief expert (and former IRS revenue officer) Jeffrey McNeal says when he processed offers, he saw tons of mistakes made on the forms, even when prepared by CPAs and enrolled agents!

Say, for instance, you owe the IRS $14,000 and submit an Offer in Compromise…

Making sure all the math is right and all fields are filled out properly on Form 433 is just the starting point.

Only 41% of submissions get approved, so it must be done perfectly to give you the best chances.  If it goes to appeal, you will not only need to fill out a form. McNeal states that just about the only ones to win their appeals were people who backed up their claims with:

• The Internal Revenue Code (IRC)
• The Internal Revenue Manual (IRM)
• Existing case law

Ask yourself: Would you be qualified to reference the above in your appeal for tax relief?

The Internal Revenue Code is made up of over 9,000 sections, while the Internal Revenue Manual is made up of 39 parts (also massive), and we know there are tens of thousands of cases in case law.

Knowing what applies and what doesn’t to an Offer in Compromise would be nearly impossible for a non-professional.

Benefits of Hiring a Tax Relief Company

You might think the only benefit to using a tax relief company would be to help reduce a balance.  But after reading hundreds of reviews of tax relief companies, we’ve discovered that tax relief companies help Americans in a variety of ways:

• provide guidance on audits
• help set up payment agreements with the IRS
• help get current on any unfilled tax returns
• some may be able to stop potential penalties such as wage garnishments

Most importantly, they pause the stress of dealing with the IRS. Typically any case submitted to the IRS takes months (or years) to review.  While waiting for their response, the IRS typically suspends any collection activities, and will often life wage garnishments, as is the case with an Offer in Compromise submission.

The key to hiring a tax relief company is choosing the right one to work with. Many of these companies are shady and some are outright scams. Always do your research, read reviews, and select a reputable partner. Never make a decision based on an advertisement or a single review!

Alternative Ways to Pay the IRS

Tax debt is a serious problem. The IRS has powers that no other creditor has and can come after you in ways that no other creditor can. Your first, best option is simply to pay them in any way possible.

Consider these options:

• Borrow from a retirement account, like a 401k or IRA.
• Borrow from your home equity using a home equity loan or HELOC.
• Use a personal loan

Borrowing money isn’t a perfect solution. You will have to make the payments on time or your credit will suffer. If you use your home equity you could lose your home if you default. It’s still better than owing money to the IRS.

Is Bankruptcy a Solution?

Bankruptcy is not a direct solution to a tax debt. Most tax debts cannot be discharged in bankruptcy, so you will have the same tax debt after bankruptcy that you did before.

Bankruptcy could still help. If you are unable to pay your tax bill because you are buried in other debts, bankruptcy could eliminate many of those other debts. You will still owe the tax debt, but you’ll have fewer other demands on your plate.

Bankruptcy is an extreme solution that will only be appropriate if your case is really desperate. Most bankruptcy lawyers offer free consultations, so if you’re considering this option you can try consulting a lawyer to review your options.

Non-profit credit counseling agencies also provide free consultations that can help you clarify your options. They will not be able to resolve your tax debt, but they could help you manage your other debts or decide whether to consider bankruptcy.

The Bottom Line

If you owe $10,000 to $15,000 in taxes, you need to make some decisions and act immediately. We hope this article has helped you clarify your options and decide whether to take a DIY approach or consider retaining a reputable tax relief company.

Get Professional Help!

Compare multiple tax relief companies at one time, pick the best option, and get help managing your tax debt.

Best Tax Relief Companies

The post Best Tax Relief Options If I Owe $10,000 to $15,000 to the IRS appeared first on FinMasters.

Having a federal tax lien isn’t the end of the world. Tax liens can cause real problems, but they can’t harm your credit: tax liens are no longer placed on your credit report. Plus, there are ways to remove a tax lien and get on with your life.

What is a Federal Tax Lien?

A federal tax lien is one tool the IRS has at its disposal to collect money owed to them. It gives the IRS a legal right to take your money or property – including your house – if you don’t pay up.

Tax liens are public records, too. If your neighbor or your uncle wants to look for a federal tax lien, they’ll be able to see it. And there isn’t anything you can do about that. You can still take steps to remove a federal tax lien.

Will it Affect Your Score?

If you worry about the impact of a federal tax lien on your credit score, you can breathe a sigh of relief. The credit bureaus – Experian, Equifax, and TransUnion – changed their policy in 2017 to remove civil judgment records and tax lien data. Want to find out for sure? Federal law allows you to get a free copy of your credit report once a year at AnnualCreditReport.com.

6 Options to Remove a Tax Lien

The IRS doesn’t give you much advance notice when they put a tax lien on your property. If you get a Notice of Federal Tax Lien, there’s not much you can do to stop it. So, what are your options? Depending on your situation, the IRS can remove a federal tax lien or withdraw it.

Check the Facts

Did you know the IRS makes mistakes? Shocking, I know. But it’s true! Not even the IRS is perfect. Sometimes the IRS will send a Notice of Federal Tax Lien in error. When this happens, the IRS will remove the lien altogether.

When the IRS withdraws a lien, the lien is erased as though it had never existed.

Canopy Tax

Fork Over the Cash

The quickest way to remove a tax lien is to pay your balance in full. That’s not always an option. You could explore the idea of taking out a personal loan to pay off your tax debt, using a home equity loan or HELOC, borrowing from a retirement account, or transferring what you owe to a credit card.

Try to Settle for Less

If there’s no way you’ll ever be able to pay off your tax debt, the IRS might agree to settle for less than you owe. It’s called an offer in compromise (OIC). The trouble is, it’s not very common, and the IRS can return or reject your request.

Make Payments

Quick tip: Once you start an installment plan, you will have a harder time qualifying for a debt reduction request later.  We recommend you speak to an expert to see if you qualify for an offer in compromise first.

The IRS Fresh Start Program allows the IRS to withdraw a lien if the taxpayer has entered into a Direct Debit Installment Agreement.

Canopy Tax

With a direct debit agreement, you authorize the IRS to automatically take the monthly payment from your checking account.

Play the Waiting Game

When it comes to federal tax debt, a statute of limitations applies. Here’s why that’s important, it means the IRS can’t try to collect from you forever. The statute of limitations for federal tax debt is 10 years. You must be wondering: “Will all of this go away if I ignore it for 10 years?” Probably not. It’s unlikely the IRS will sit on the sidelines while you owe them money. Their collection efforts usually get more aggressive the longer you have a balance. You’re much better off contacting the IRS directly or hiring a tax debt relief company and facing this problem head-on.

What if You Really Don’t Have the Money?

There’s something called currently not collectible (CNC) status or a temporary delay in collection. If you don’t have enough income to pay your taxes and reasonable living expenses, the IRS might grant this status and temporarily let you off the hook. You must prove that you’re struggling financially first.

Even if you have CNC status, your tax debt will grow with penalties and interest charges. You’ll also get a tax bill in the mail every year. And if you’re expecting a refund on your income taxes while you have a balance, the IRS will likely keep that for themselves, at least until your balance is paid in full. In this case, if you remain CNC for 10 years, the statute of limitations is up, and the IRS can’t try to collect from you anymore.

A Tax Lien Doesn’t Mean You Lose the Property

A tax lien is a claim on your property. You will not be able to use the property as collateral for a loan while a lien is in place. A lien does not mean you lose the property. You could, if the IRS thinks you are simply refusing to pay, but if you reach any kind of deal with the IRS the lien can be lifted.

If you have a tax lien, act immediately. Contact the IRS directly or hire a reputable tax relief company, but don’t wait. If you can negotiate a solution and make your payments there’s a good chance that the lien will be lifted.

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