What you can do yourself, for free or close to it
Tax relief companies mostly file the same IRS requests you can file yourself. Here are the main options, starting with the most common.
1. Payment plans
| Plan | Who qualifies (online) | Setup fee online |
|---|---|---|
| Short-term (up to 180 days) | Owe less than $100,000 in combined tax, penalties and interest | $0 |
| Long-term, direct debit | Owe $50,000 or less and have filed all required returns | $29 (waived for low-income taxpayers) |
| Long-term, other payment method | Same as above | $69 ($43 for low-income taxpayers, may be reimbursed) |
| Revise or reinstate an existing plan | Existing plan holders | $6 |
Source: IRS, “Apply online for a payment plan,” checked October 2026. Fees by phone, mail or in person may be higher.
The IRS has said long-term plans for balances under $50,000 can run up to 72 months. Penalties and interest keep accruing until the balance is paid, so paying faster costs less. Businesses can’t apply online and must call 800-829-4933.
2. Penalty relief (First Time Abate)
If you filed the same type of return on time for the prior three years and had no penalties in that period (other than an estimated tax penalty), the IRS may remove failure-to-file, failure-to-pay and failure-to-deposit penalties, regardless of the amount. You don’t need to cite the policy or send documents. Call the number on your notice, or send a written statement or Form 843. When a penalty is removed, the interest charged on that penalty is removed automatically.
The IRS says First Time Abate is transitioning to an Automatic Exemption from Penalty, beginning in summer 2026, under which qualifying penalties are not assessed at all.
3. Currently Not Collectible (CNC) status
If paying anything would leave you unable to cover basic living expenses, the IRS can pause most collection. You request it by calling 800-829-1040 or the number on your notice, and you may need to complete Form 433-F, 433-A or 433-B with proof of income, expenses and assets. The catches:
- The debt isn’t forgiven, and penalties and interest keep growing.
- The IRS may file a Notice of Federal Tax Lien.
- Future refunds can be applied to the balance.
- The IRS can review your finances later and resume collection.
4. Offer in Compromise (OIC)
An OIC settles your tax debt for less than you owe. The IRS looks at your income, expenses and asset equity, and generally won’t accept an offer if you could pay in full through a payment plan or your assets.
- Eligibility: all required returns filed, required estimated payments made, and not in an open bankruptcy.
- Cost to apply: a $205 application fee plus an initial payment. With a lump-sum offer you send 20% of the offer up front and pay the rest in five or fewer payments if accepted. With a periodic offer you make monthly payments while the IRS reviews it.
- Low-income waiver: qualifying individuals pay no fee and no payments during review.
- Check first: the IRS OIC Pre-Qualifier tool estimates whether you’re likely to qualify.
| IRS fiscal year 2025 | Figure |
|---|---|
| Offers proposed | 38,797 |
| Offers accepted | 5,464 |
| Total dollars accepted | $98.1 million |
| Accepted as a share of proposed | About 14% (roughly 1 in 7) |
| Average accepted offer | About $18,000 |
Source: IRS Data Book, fiscal year 2025, Table 4-1. Share and average are our arithmetic; some offers accepted in 2025 were submitted earlier.
Those numbers are the best reality check on ads promising settlements. A firm that guarantees an OIC before reviewing your income and assets can’t know whether you qualify.
Free help: the Taxpayer Advocate Service and LITCs
Taxpayer Advocate Service (TAS) is an independent organization within the IRS, and its help is free. It can step in when you haven’t been able to resolve a problem through normal IRS channels and the problem is causing financial difficulty, you face an immediate threat of adverse action, you’ll suffer long-term harm, or the IRS hasn’t responded when it said it would. TAS has at least one office in every state, D.C. and Puerto Rico, and can be reached at 877-777-4778.
Low Income Taxpayer Clinics (LITCs) represent people in audits, appeals, collection matters and Tax Court, for free or a small fee. They are independent of the IRS and TAS. Income generally must be at or below 250% of federal poverty guidelines. For 2026 in the 48 contiguous states and D.C., that’s $39,900 for one person and $54,100 for two, plus $14,200 for each additional person. The amount in dispute is usually under $50,000. Many clinics also help people who speak English as a second language.
What tax relief firms charge
Most firms start with an “investigation” or account review fee, then charge a separate fee to resolve the case. Money.com reported this pricing (accurate as of January 2026) for firms it reviewed:
| Company | Starting fees reported | Typical minimum debt | Refund window |
|---|---|---|---|
| Community Tax | $549 investigation; $2,000–$7,000 total relief | $10,000 | 14 days |
| Larson Tax Relief | $250 review; full relief at least $2,500 | $10,000 | 15 days |
| Optima Tax Relief | About $495 investigation | $10,000 | 15 days |
| Anthem Tax Services | Around $1,750 | $20,000 | Guarantee if situation doesn’t improve (exclusions apply) |
| Tax Defense Network | Average fee $3,500 | $5,000 | 30 days |
| Victory Tax Lawyers | From $5,500 | $25,000 | None |
Source: Money.com, “Best tax relief companies” (October 2026 edition; prices as of January 2026). Confirm current fees in writing.
Money.com also noted complaint history worth checking: Optima’s Better Business Bureau rating was previously downgraded after more than 770 complaints in three years (it is now A+), and Tax Defense Network’s BBB profile carries an alert about a pattern of complaints. Compare any quote with the $29–$69 cost of setting up an IRS payment plan yourself, or the $205 OIC application fee.
Enforcement against tax relief firms
- American Tax Service (FTC and Nevada, 2025–2026). A federal court temporarily halted the operation in October 2025. Regulators alleged it promised “pennies on the dollar” settlements before reviewing customers’ finances, impersonated government tax authorities, sent threatening letters, did little or none of the promised work and refused refunds. In June 2026 Nevada announced a proposed settlement in which two operators must surrender assets worth nearly $10 million and are permanently banned from debt relief and tax preparation; a $77.7 million judgment was suspended based on their finances. The settlement needed court approval, and the FTC’s case against the corporate defendants was continuing. Regulators said the operation targeted older consumers with costly add-ons, sometimes tens of thousands of dollars.
- Wall & Associates (Minnesota, 2025). A Hennepin County court ordered the Virginia-based firm to pay more than $2.7 million in refunds and more than $1.4 million in civil penalties. The court found it falsely presented itself as a local law firm, claimed to settle debts for about 10% of what clients owed, and that most Minnesota customers paid more in fees than they saved.
- The IRS’s own warning. In September 2024 the IRS warned about “OIC mills” that use aggressive ads, guarantee pennies-on-the-dollar settlements, invent deadlines and charge steep fees for help taxpayers can get directly from the IRS.
How to vet a tax professional
- Check the credential. Enrolled agents, CPAs and attorneys have unlimited rights to represent you before the IRS, including collections and appeals. Preparers with only an Annual Filing Season Program record can’t represent you in collections or appeals. Search the IRS Directory of Federal Tax Return Preparers with Credentials, and your state’s CPA board or bar.
- Know who does the work. Ask for the name and credential of the person who will handle your case, not just a salesperson.
- Get the fee structure in writing, including what the investigation fee covers and whether the resolution fee is flat or hourly.
- Walk away from guarantees. Promised settlement amounts, “limited-time” IRS programs and claims the debt will disappear are the IRS’s listed warning signs.
- Report abuse of tax promoters or preparers to the IRS on Form 14242.
Tax debt often sits alongside other bills. If credit cards are part of the picture, our debt relief guide explains settlement rules and risks, and a realistic budget helps you choose a payment plan amount you can keep up. Once you’re current, an emergency fund makes the next tax bill easier to cover. More in our tax relief hub.
Frequently asked questions
Can I set up an IRS payment plan without a tax relief company?
Yes. If you owe $50,000 or less and have filed all returns, you can apply online for a long-term plan; the setup fee is $29 with direct debit or $69 otherwise. Short-term plans of up to 180 days for balances under $100,000 have no setup fee.
How often does the IRS accept an Offer in Compromise?
In fiscal 2025 the IRS received 38,797 offers and accepted 5,464, about one in seven, totaling $98.1 million. The IRS generally rejects offers when you could pay in full through a payment plan or your assets.
How much do tax relief companies cost?
Money.com reported investigation fees of roughly $250 to $549 and total resolution costs from about $1,750 to $7,000 or more, depending on the firm and case. Most require a minimum tax debt of $5,000 to $25,000.
Is the Taxpayer Advocate Service really free?
Yes. TAS is an independent organization within the IRS and doesn't charge for its help. It can assist when an IRS problem is causing financial difficulty or the IRS hasn't resolved it through normal channels. Call 877-777-4778.
Can the IRS remove penalties?
Often. Under First Time Abate, the IRS can remove failure-to-file, failure-to-pay and failure-to-deposit penalties if you have a clean three-year history. Call the number on your notice or file Form 843. Interest on the removed penalty is also removed.
What does currently not collectible mean?
The IRS pauses most collection because paying would cause financial hardship. You still owe the debt, penalties and interest keep growing, a tax lien may be filed and refunds can be applied to the balance.
Who can represent me before the IRS?
Enrolled agents, CPAs and attorneys have unlimited representation rights, including in collections and appeals. Check credentials in the IRS directory of preparers and with your state CPA board or bar.
Sources
- IRS – Apply online for a payment plan
- IRS – Offer in Compromise
- IRS – Collections, activities, penalties and appeals (Data Book Table 4-1)
- IRS – Administrative penalty relief
- IRS – Temporarily delay the collection process
- IRS – IRS warns of 'mills' taking advantage of taxpayers with Offer in Compromise program (IR-2024-243)
- IRS – Topic no. 104, Taxpayer Advocate Service
- Taxpayer Advocate Service – Low Income Taxpayer Clinics
- IRS – Understanding tax return preparer credentials and qualifications
- Nevada Attorney General – Settlement requiring tax-relief scammers to surrender nearly $10 million (June 2026)
- CPA Practice Advisor – FTC sues tax debt relief company (Nov 2025)
- Minnesota Attorney General – Tax debt settlement company ordered to pay more than $4 million (Apr 2025)
- CPA Practice Advisor – IRS provides year in review in 2025 Data Book
- Money.com – Best tax relief companies
Rates, fees and terms change often. Figures were checked in October 2026; confirm current details with the provider before you apply.