A Client Came to Me After Hiring Optima Tax Relief. Here's What Happened.

The TLDR is this: my client paid Optima Tax Relief just north of $4,000 to get caught up on several years of unfiled tax returns. Nearly a year later, no returns were filed. He had no clear sense of where his case stood, and he was becoming increasingly frustrated. After I stepped in as his representative and provided Optima with information they requested, the returns still had not been completed. I sent a formal written demand for a refund and got nothing but boilerplate replies. We then filed complaints with several agencies.

If you want all the gory details, keep reading.

I wanted to share this for anyone dealing with an IRS problem, tax debt, unfiled returns, or considering one of the large tax relief companies you See on TV and Hear on the Radio.

I'm an IRS Enrolled Agent here in Fort Worth, and I recently took on a client's case involving Optima Tax Relief.

My client paid them just over four grand to get caught up on several years of unfiled returns. Nearly a year later, he still had no tax returns filed and told me he had no clear understanding of where his case stood. At one point he was sent a detailed profit and loss worksheet he didn't know how to complete. He'd hired a company because he needed help, and instead he was left feeling even more discouraged. When he sat down in my office, his hands were visibly shaking.

After I was hired, I filed Form 2848 (Power of Attorney) with the IRS, completed Optima's third-party authorization, introduced myself to the team working on his case, and answered the outstanding questions they had for my client so they could continue processing the returns. Weeks passed with precious little to show for it. After yet another call for a status update produced no meaningful progress, I sent a formal written demand for a refund with a clear deadline.

They responded twice. Once from a tax preparer, who said she was "expediting" his returns but was still requesting basic information I'd already provided after I began representing the client. Once from a customer relations representative with a canned response. Neither addressed the refund request.

Mind you, at this point it had been over a year since he paid them.

We've since filed complaints with the FTC, the California DFPI, and the BBB documenting our experience.

What struck me most is how many people don't realize they have options before paying a company thousands of dollars upfront.

To get started, you're asked to sign a contract and IRS Form 8821 (Tax Information Authorization) so the company can access your IRS transcripts. Those same transcripts are available to you for free directly from the IRS.

Once your tax situation is reviewed, the available resolution options are generally the same regardless of whether you're represented or not: an Offer in Compromise if you qualify, Currently Not Collectible status if appropriate, or an installment agreement. Before any of those can be considered, the IRS generally requires you to be in filing compliance, meaning the last six years of returns are filed, even if you are unable to pay what's owed.

Some of these programs require you to provide detailed financial information and documentation. The IRS isn't simply asking whether you owe taxes. They're trying to understand your overall financial situation before determining what relief, if any, may be available.

Depending on your circumstances, you may also qualify for relief from certain IRS penalties. Penalty relief is separate from the resolution options above, and for eligible current returns, qualifying taxpayers may receive relief automatically under the IRS's new Automatic Exemption from Penalty (AEP) program.

These are IRS programs, and representation is not required to access them. The value of representation is having someone help you understand your options, prepare the necessary paperwork, communicate with the IRS when appropriate, and navigate the process.

Optima Tax Relief doesn't have a walk-in office. Their corporate office is located in Santa Ana, California. Communication happens by phone, email, mail, or through their client portal, along with electronic notices for anything involving the IRS. In my own experience calling in on this case, I wasn't speaking with the preparer handling the work. I was speaking with someone assisting the preparer. I can't say if that's typical, but if your return is more complex, your level of direct access to the person actually doing the work may vary. I mention this because not everyone is equally comfortable with apps and portals, and if that kind of digital back-and-forth would add to your stress rather than ease it, especially while you're already dealing with a tax problem, a local preparer or CPA you can sit down with in person might genuinely serve you better.

Before you hire anyone, ask questions.

• What exactly are you paying for?

• Who will actually be handling your case?

• What is the timeline?

• How often will you receive updates?

• What happens if the work isn't completed?

Read the contract carefully, especially the sections covering refunds and arbitration, before you sign.

People facing tax problems are already under enough stress. You shouldn't have to wonder whether anything is happening after you've paid thousands of dollars. That's why it's so important to understand your choices before you sign instead of spending months wondering what happened after the fact.

One last thing I'd encourage people to keep in mind is that hiring someone to handle your taxes doesn't transfer responsibility for your tax obligations, and it doesn't replace your involvement. The IRS still considers you responsible for your own tax situation. A good representative can help you make sense of your options and handle communication with the IRS, but they'll always need information that only you have. That's true regardless of who you hire: a local preparer, a CPA, an attorney, or a national company. The best outcomes happen when it's a partnership.

If you're self-employed, that partnership starts with good records. One of the best things you can do for yourself is make recordkeeping part of your normal routine instead of something you only think about at tax time. There isn't one right way to do it. Maybe it's using a dedicated account for business income. Maybe it's dropping receipts into a gallon freezer bag as you go. Maybe it's another system that fits naturally into your routine. The goal isn't perfection. It's making sure you and your preparer have the information you need when it's time to prepare a return or respond to an IRS question.

The same idea applies after your return is filed. The IRS will continue sending notices directly to you as the taxpayer, and you can also authorize copies to be sent to your representative. Ideally, whoever you're working with will contact you if something needs your attention. But if a notice shows up in your mailbox, don't assume it's already been handled. Reach out and ask. Staying engaged in your own case is one of the best ways to make sure nothing slips through the cracks.

Stay Sharp. 🗡️

-VH

Pull your own tax transcripts

See what the IRS has on file for you, including wage and income information from prior years. Transcripts can also be helpful if you're missing tax documents needed to prepare a return.
https://www.irs.gov/individuals/get-transcript

Check if you qualify for an Offer in Compromise

Use the IRS Pre-Qualifier tool to see whether an Offer in Compromise may be an option before completing the full application.
https://irs.treasury.gov/oic_pre_qualifier/

Request Currently Not Collectible status

If you're unable to pay because of financial hardship, the IRS may temporarily delay collection activity while your situation improves.
https://www.irs.gov/businesses/small-businesses-self-employed/temporarily-delay-the-collection-process

Set up an installment agreement

Apply online to pay your balance over time if you qualify.
https://www.irs.gov/payments/online-payment-agreement-application

Request penalty relief

Learn about IRS penalty relief, including the new Automatic Exemption from Penalty (AEP) program and other available relief options.

‍ ‍Administrative penalty relief (AEP):

https://www.irs.gov/payments/administrative-penalty-relief

Penalty relief (including reasonable cause):

https://www.irs.gov/payments/penalty-relief

Need to file your returns?

The person who prepares your tax returns doesn't necessarily have to be the same person or company who helps you resolve your tax debt, and vice versa. If your biggest hurdle is simply getting your returns filed, including prior years, I've personally found FreeTaxUSA* to be one of the easiest self-filing options to use. Federal returns are free, prior-year returns can also be prepared there, and state returns are available for an additional fee.
https://www.freetaxusa.com/

*No affiliation or sponsorship. I just don't think you should have to pay to e-file a return you can prepare yourself. It's what I've used myself and recommended to friends and family.