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- Community Tax is a full-service tax company specializing in helping people resolve federal and state tax debt.
- The initial consultation is free, but the all-in cost of services runs from $1,750 to $3,275.
- Community Tax is a strong option for people who might qualify to reduce their debt because of financial hardship.
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Tax debt can follow you for years. With the added expense of interest and penalties, a balance can quickly snowball.
That’s why tax resolution companies exist. For a fee, they can evaluate your debt situation, investigate your options for payment or forgiveness, and submit all the necessary paperwork to the IRS or your state government agency.
One such company is Community Tax. Since its founding in 2010, it has helped clients resolve a total of $794 million in tax debt.
Here’s what Community Tax can help with and how much it charges.
Who should use Community Tax?
If you owe a large amount of back taxes and are struggling to pay, need to file previous years’ tax returns, or are about to have your wages garnished or property seized for unpaid taxes, it’s smart to connect with a CPA, tax lawyer, or Enrolled Agent who has experience working with government tax agencies. Community Tax staffs several professionals with these credentials.
Community Tax can help you decipher tax notices, decide which IRS or state payment program is right for you, collect and organize your financial documents, and present your case to the government.
You might like Community Tax if you:
- Are behind on tax filing
- Need help deciphering IRS notices and figuring out the best path forward
- Don’t have the time, energy, or knowledge to apply for a payment program on your own
- Suspect you might qualify to reduce your debt because of financial hardship
You might not like Community Tax if you:
- Owe less than $5,000
- Can’t pay up to $3,275 in fees
- Want to work face-to-face with a tax professional and live outside Illinois
What is Community Tax?
Community Tax is a Chicago-based full-service tax company that specializes in helping taxpayers all over the US settle federal and state debts. The company has an A+ rating with the Better Business Bureau and an average rating of 4.38 out of 5.
It is also an IRS-Approved Continuing Education Provider, meaning it is authorized to provide educational courses to Enrolled Agents (the highest credential awarded by the IRS).
How much does Community Tax cost?
There are three fee stages to working with Community Tax.
Consultation: Free. A case manager will get familiar with your situation and explain the possible paths forward.
Investigation: $250-$275. If you agree to hire Community Tax, they will perform a tax investigation in which they review your tax transcripts from the IRS and recommend the best solution. Recommendations can include applying for one of the various types of installment agreements, an offer in compromise, or Currently Not Collectible status, and preparing and filing back tax returns. If you’re not satisfied with the recommendations, Community Tax will refund your fee.
Resolution: $1,500-$3,000. The final step is collecting evidence and submitting a proposal to the IRS or state government on your behalf. Fees vary depending on the complexity of your situation.
From start to finish, the average client works with Community Tax for three to five months.
An installment agreement means you pay off your tax balance over time, usually anywhere from six months to 10 years (the IRS statute of limitations). These agreements come in several variations to accommodate a taxpayer’s personal financial situation. Some are harder to qualify for than others.
An offer in compromise is when the IRS agrees to forgive a portion of your tax debt so that you don’t fall into financial hardship trying to make payments. It can be difficult to qualify for, but working with a tax professional who has experience negotiating with the IRS can make a big difference.
What is tax resolution?
A tax relief company won’t pay your debts for you. Rather, it will give you access to online resources and professionals who can help you get organized and figure out how to pay your debt over time or settle for less than you owe if you’re experiencing financial hardship.
You don’t need to use a tax resolution company to settle your tax debt. The IRS outlines available payment plans on its website and free guidance is available through the Taxpayer Advocate Service, although offices are currently closed due to the pandemic and phone lines are often overwhelmed.
However, it can be valuable to work with a tax resolution company if you’re under a time crunch, need professional representation, or are overwhelmed with your debt. You’ll still have to provide documentation to the company to help them evaluate your situation, but the time commitment on your end could be significantly reduced.
In most cases, the professionals who work for tax resolution companies have many years of experience negotiating with the IRS and state agencies, and may be able to strike a better deal than you could on your own.
Is tax resolution a good idea?
If you don’t have the cash to pay for tax resolution services, then it’s probably not worth it to add to your debt load.
That said, the IRS or your state agency will continue to track you down for unpaid taxes. If you’re struggling to find a way to pay or get approval for a relief program, a tax resolution company can help you put together a compelling case if you don’t have the time, energy, or knowledge to do it yourself.
Can I trust tax resolution companies?
It’s always good to stay vigilant when dealing with a company that purports to help resolve your debt. Often, these companies can get away with overcharging clients because they’re in a desperate situation and need help.
A Better Business Bureau accreditation and high rating is a good sign that a tax resolution company is trustworthy, but it’s not necessary. Ultimately, the best companies have qualified professionals on staff, are upfront about their pricing, and honest about possible solutions for your situation. They will also be clear about whether or not you could benefit from their services before asking for payment.
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