Community Tax Review 2022: Honest Opinion by a CPATax Relief
- Community Tax
- Basics: Community Tax is a tax relief company founded in 2010 by two attorneys (who happen to be brothers) as well as enrolled agent.
- Pros: Community Tax fully discloses who is on its staff on its about page, and it does appear to have qualified professionals to work on clients' tax issues. It has many apparently legitimate good reviews on sites like BBB.
- Cons: Some clients complain about miscommunications from Community Tax regarding important things like the pricing of their services as well as the timeline of when work will be completed.
- MINIMUM DEBT:
- STATES SERVICED:
- AVERAGE PRICE:
Yes, but terms not specified
Community Tax is a tax relief company that claims to have resolved over $800 million in tax debt for over 100,000 clients.
They do this by providing obtaining the following arrangements with the IRS for their clients:
- Offer in Compromise: This is an agreement with the IRS to settle one’s tax debt for less than one owes.
- Installment Agreement: This is an agreement with the IRS to pay off a taxpayer’s tax debt, either in full or in part, via monthly payments.
- Currently Not Collectible Status: Unlike the other two major tax resolution solutions, this one does not require the individual to pay the IRS. Being placed in currently not collectible status means that the IRS has reviewed the taxpayer’s case and determined that they cannot collect on their tax debt at this time but may be able to in the future.
These services are what all tax resolution companies do for their clients. Unfortunately, there are some bad actors in this space; the Federal Trade Commission even calls some tax relief companies “fraudsters” who don’t even communicate with the IRS on their clients’ behalf.
So before you engage Community Tax or any other tax relief company to help you with your IRS or state tax authority situation, it’s important for you to thoroughly research and vet them to make sure you don’t get scammed.
As a CPA whose clients have asked me about Community Tax’s services, I decided to take a look at their business model and write this Community Tax review.
WATCH the video below to learn how to qualify for an offer in compromise to settle your IRS tax debt!
What Is Community Tax?
Community Tax is a tax relief company that’s been around since 2010. It has claimed to founded in 2000 that claims to have “facilitated over $2.2 billion of financial obligations for over 20,000 individuals.” I have to question why exactly this amount is phrased in this way; if this was all tax debt, why didn’t they just say that?
Lawyers and Enrolled Agents on Staff
Unlike some other tax relief companies, Community Tax fully discloses the professionals on its team. Founded by two attorneys and an enrolled agent, there are three other enrolled agents and two other attorneys listed on Community Tax’s about page.
Community Tax does not appear to have any CPAs working for it, but that’s OK since attorneys and enrolled agents can represent clients before the IRS in resolution matters as well.
- BBB Accredited: A+ Rating With 5/5 Rating
- Guarantee: 30-Day Moneyback Guarantee
- Reasonable Fees: Lower than Industry Averages
Community Tax Features
|Minimum Tax Debt||$5,000|
|Average Resolution Fee||$3,000|
|Offer in Compromise||Yes|
|Currently Not Collectible Status||Yes|
|Business Tax Issues||No|
|Money-Back Guarantee||Yes, but terms not stated on website|
|CPAs on Staff||No|
|EAs on Staff||Yes|
|Tax Attorneys On Staff||Yes|
|All 50 States||Yes|
How Community Tax Works
On its offer in compromise page, Community Tax describes the offer in compromise process.
It uses an example of a taxpayer who owes $50,000 in back taxes, fees, penalties, and interest to the IRS.
It then describes how an offer in compromise could allow the taxpayer to settle their tax debt for $15,000 “through negotiations.”
In my opinion, this description of the offer in compromise process is a bit misleading in that it implies that there is some significant “negotiation” with the IRS to secure an offer in compromise.
In reality, the offer in compromise process is much more about a formula and knowledge of the IRS’s own rules than about negotiation skills.
Another disturbing thing about this page is that Community Tax says:
“When it comes to your Offer in Compromise, it’s imperative that you have a killer argument as to why you should be able to settle for less. It’s always recommended that you work with a tax professional when pursuing an offer in compromise. A professional can help you build a bulletproof argument, ensure that you have all of the documentation and proof that you need, and can manage the negotiation process.”
These sentences rub me the wrong away for a few reasons:
- If a taxpayer’s situation is simple with very little income and assets and an aged tax debt, it may be more advisable for them to simply educate themselves on the offer in compromise rules and submit their offer themselves to save the money they would pay to a tax relief company.
- Community Tax implies that the IRS accepting a taxpayer’s offer in compromise comes down to the taxpayer having a “killer” or “bulletproof” argument. While formulating a “killer” argument is useful for certain types of offers in compromise (such as effective tax administration), the more common kind of offer in compromise (doubt as to collectibility) comes down to math: showing the IRS that you won’t be able to afford to pay off your tax debt before the statute of limitations on collections expires.
- Again, Community Tax describes the offer in compromise process as a “negotiation” when it’s really more about a mathematical formula than about one’s skill as a negotiator. The IRS has rules within which it must operate according to the Internal Revenue Manual; no prowess as a negotiator can overcome that.
Of course, I understand the business perspective here; Community Tax has to sell its services.
That’s fine, but it’s my job to educate you and give you my honest opinion on what Community Tax is saying.
Community Tax Details
Here’s the basics on Community Tax’s business model.
Community Tax does not disclose its fees on its website, but other sites claim that it has a two-step pricing model:
- Investigation fees of $325: This typically involves the work of pulling a client’s transcripts from the IRS and developing a tax resolution plan.
- Resolution fees ranging from $750 to $5,000: This is the actual work of gathering a client’s financial data, completing the appropriate IRS forms, and submitting the package to the IRS.
Why is there such a wide range in the fees? Well, I haven’t used Community Tax as a client, but I would guess that a $750 job might be simple lien release, withdrawal, subordination, or discharge while a $5,000 job might be an offer in compromise for a higher-than-average tax balance.
Community Tax says that it performs tax resolution services for residents of all 50 states.
It does not disclose the minimum tax debt someone must have for Community Tax to work with them, but other sites claim this amount is $5,000.
Community Tax mentions that it offers “a guarantee on [their] work,” but I could not find any more details about this other than other sites mentioning that it has a 14-day money-back guarantee.
How to Sign Up for Community Tax
If you’re interested in learning more about Community Tax, here’s what the process looks like.
Step 1: Sign up for a free consultation.
This is a simple process that involves filling out a form on Community Tax’s site that asks for:
- Your name
- Your phone number
- Your email address
Step 2: Talk to a Community Tax salesperson.
You will then schedule a time to speak with someone from Community Tax.
This individual will likely not be a tax professional but a salesperson trained in getting you to bust out your credit card and sign up for Community Tax’s services.
And here’s where tax relief firms can get themselves into trouble.
See, the salespeople typically work on commission, and if they’re hungry for a deal, they may make claims of what Community Tax can do for your situation — claims that Community Tax may not actually be able to make good on.
This is why educating yourself is important. Be sure to review the offer in compromise rules and get an idea if you qualify before signing up for tax relief services that cost thousands of dollars.
Step 3: Pay Community Tax.
If you choose to move forward working with Community Tax, you will likely be asked to provide credit card information so you can pay the $325 investigation fee for Community Tax to start looking into your case.
Community Tax BBB Reviews
Community Tax has been BBB accredited since March 1, 2015, and as of the time of writing has a 4.34/5 score based on 179 reviews.
And while most of the ratings are positive, there are some negative reviews including the ones in the table below.
|Shannon claimed that four years ago she paid Community Tax $10,000 and every three to six months they would ask for the same financial documents, submit an offer to the IRS, and then wait for the IRS to respond.|
She also claimed that Community Tax is not "negotiating" but rather just "dragging it out." She said that she was not aware of the statute of limitations — i.e. that the collection statute on her debt only had another two years to run — nor did Community Tax educate her about the statute of limitations.
|Assuming that Shannon's claim is true, this is very concerning. Now, I think that part of the misunderstanding here is that Community Tax has positioned the offer in compromise as a skilled negotiation process between the tax professional and the IRS when in reality the process is exactly as she described — submitting your offer to the IRS and waiting for them to make a decision on it.|
However, the bigger issue in my opinion is that Community Tax never informed her about the 10-year collection statute of limitations that was going to run out on her debt in a couple years before selling her an offer in compromise because the offer in compromise extends the statute of limitations on a taxpayer's debt.
|Derek claimed that he paid Community Tax $300 to investigate his situation and they came back to tell him that there was nothing they could do.||Sometimes, there is really nothing that a tax relief company can do for a client, and I don't think it's unfair for them to be compensated for the time they spent in making that determination. That said, hopefully Derek was informed by Community Tax before he paid the $300 that their investigation may indicate that they are not able to do anything for him.|
|Catherine claimed that she spoke with Community Tax several times and was assured that they would help her resolve her tax debt. On this basis, she claimed that she paid Community Tax thousands of dollars, only to be told that she was not eligible for an tax reduction or abatements.||Although I feel for Catherine's situation, if all Community Tax told her was that they would help her resolve her tax debt — and did not specifically mention tax reduction — then I see nothing wrong with what Community Tax did here.|
|Daniel claimed that he paid Community Tax $3,000 and they have been unresponsive. After he paid them, he got a letter from a tax authority stating that his account had been sent to collections.||I'm not sure if Daniel's claim is true or not (I have no way of knowing), but I do know that sometimes tax relief companies can be very good at getting people to pay for their services but then drop the ball when it actually comes to providing the services promised.|
|Jamie claimed that she told Community Tax exactly what she needed — tax return preparation — but they still charged her a $500 investigation fee to tell her what she already knew i.e. that she needed to file her taxes. All in all, Jamie paid Community Tax $1,000 to file two years of tax returns.||If what Jamie says is true, then this is unprofessional behavior on Community Tax's part, assuming that her tax returns are simple and straightforward. $500 per year is too much to pay for a simple tax return.|
|Karl claimed that he paid Community Tax $1,400 because they claimed they could take care of his back taxes within 90 days but it ended up taking six months, in which time Karl had his paychecks garnished.||If what Karl said is true, then obviously Community Tax did not make good on its promise to help him in a timely fashion. I wonder if this 90-day deadline was stated in writing. This comes back to my key points that it's important that consumers 1) educate themselves about the tax relief process and 2) make sure that every claim their tax relief company gives them is documented in writing.|
|Dave claimed that he paid Community Tax $4,100, after which Community Tax became unresponsive for at least 8 weeks.||This is a common complaint about tax relief firms — that they collect the initial payment and then go radio silent for weeks, months, or even years on end. I obviously can't independently verify if what Dave said is true or if possibly he had not provided Community Tax some information they needed to proceed with his case.|
|Debra M. Fogel |
|Debra claimed that she paid Community Tax $1,000 because they told her that they could help her get her $6,000 tax debt reduced but they were not able to do so. She claimed that when she complained about this, Community Tax only refunded her $250 rather than the full $1,000.||If what Debra says is true, then this is the classic example of a tax relief salesperson saying one thing to get the sale but the tax team discovering that the client is not actually eligible for tax debt reduction.|
|Mijo complained that he paid $3,500 to Community Tax for them to prepare two years of tax returns and to lower the amount he owes to the IRS but all they did was set up a full-pay installment agreement, which he could have obtained himself with the IRS.||If what Mijo says is true, then what I imagine happened here is that a Community Tax salesperson said one thing i.e. that they could reduce the amount of tax he owes to the IRS, but then Community Tax's tax professionals looked at his case and determined that the best thing they could do is set him up with an installment agreement. This is why it's important for people to educate themselves before signing up for a tax relief service.|
|Josh claimed that he paid Community Tax $500 for a preliminary report that they would not refund Josh after they had his report ready. Based on this, Josh felt that Community Tax does not stand by its money-back guarantee.||Community Tax should make the terms of its money-back guarantee clearer, if not on the website at least before they charge clients' credit cards. There seems to be confusion surrounding how exactly Community Tax's money-back guarantee works.|
|Robin B. |
|Robin claimed that Community Tax charged her $2,000, claiming that they would abate her penalties but all they did was set up an installment agreement with the IRS.||Either the Community Tax salesperson got greedy and overpromised the client or the client misunderstood what they were saying. Either way, the services to be provided should have been clearly laid out in writing so there was no confusion.|
|Maria claimed that Community Tax quoted her $2,000 to abate a penalty.||While this does seem like a high amount to charge for penalty abatement, I'm not sure that simply quoting high fees warrants a bad review.|
|Brenda complained that she provided Community Tax with her personal information during the free consultation but they didn't call her back afterward to discuss her tax situation. This led Brenda to believe that Community Tax is a scam out to steal people's identities.||It's possible that Community Tax did not make good on its commitment to called Brenda back to let her know the way forward, which is obviously not good service. But it's a stretch to conclude that Community Tax is an identity-thieving scam on that basis online.|
|Cinde claimed that Community Tax did not file her state tax returns even though they claimed they did.||If this is true, this is a big-time mistake on Community Tax's part.|
|William complained that his offer in compromise was rejected.||There is no guarantee that the IRS will accept anyone's offer in compromise. As long as Community Tax did not make some kind of guarantee, I see nothing wrong here.|
|Mitchell claimed that Community Tax had not done anything to resolve his tax issue even after 2 years.||This kind of "lack of responsiveness" complaint is common in the tax relief industry. Sometimes it's the company's fault, but sometimes it's the client's fault for not providing necessary information.|
|Josh claimed that Community Tax did not refund him his initial investigation fee even though they said they would.||Community Tax is under no obligation to return the initial investigation fee, but if they said that they would, they should have.|
|Lydia claimed that Community Tax quoted her $7,000 to handle both her federal and state tax issues but only handled her federal issues for that fee, wanting an additional $5,000 to resolve her state tax issues.||This seems like something that should have been clarified in writing, not verbally. I'm not sure who's at fault here.|
Community Tax Pros and Cons
Based on my research and my expertise as a CPA, here is my opinion on the pros and cons of using Community Tax for tax relief services.
Community Tax Pros
Transparent Team: Unlike other tax relief companies that don’t disclose who’s on staff, Community Tax does disclose who its tax professionals are on its team page. Although not a bulletproof indicator of providing quality service, it’s generally a good sign when attorneys and enrolled agents are willing to publicly put their names on the line like this.
Some Satisfied Customers: On the BBB website, it does appear that the majority of customers who reviewed Community Tax were satisfied.
Accessible: Community Tax can be used by taxpayers in all 50 states and at $5,000 has a lower minimum tax debt than other tax resolution companies
Community Tax Cons
Lack of Responsiveness: Some customer reviewers expressed dissatisfaction that Community Tax took so long to work on their cases (in some cases after telling the customer that their issue would be resolved much faster).
Potentially Unclear Service Agreements: Many customers expressed that they were told one thing by a salesperson about what Community Tax could do for them but Community Tax was not actually able to provide the promised service. Either way, the specific services to be provided should be document in writing in a service agreement.
Unclear Money-Back Guarantee: Although Community Tax claims on its website to have some kind of guarantee on its work, it’s possible that customers are not adequately informed on how the guarantee works. Some customer reviewers stated that they felt they should have been returned a payment they made to Community Tax based on Community Tax’s money-back guarantee but that the particular payment they made did not qualify for the guarantee.
Community Tax Frequently Asked Questions
Where is Community Tax located?
Community Tax services clients nationwide, but its corporate office is in Chicago, Illinois.
Does Community Tax help with state tax issues?
Yes, Community Tax can help with state tax issues.
On various location-specific marketing pages such as this one, Community Tax claims that they can help those who have “found [themselves] in need of either state or federal tax relief help.”
How long does Community Tax take?
Based on customer reviews, it appears that Community Tax makes an effort to resolve clients’ tax issues quickly, though some reviews claim that Community Tax sat on their file for as long as two years.
What’s not clear is if this was due to Community Tax’s lack of action or slowness on the part of the IRS or state tax authority.
Logan is a practicing CPA and founder of Choice Tax Relief and Money Done Right. After spending nearly a decade in the corporate world helping big businesses save money, he launched his blog with the goal of helping everyday Americans earn, save, and invest more money. Learn more about Logan.