No that’s completely wrong. It is fine to talk to the IRS directly. You do not need to pay someone to talk to them for you.

The IRS cares about getting its money at some point and they are actually quite flexible about payment plans.

Optima is a tax relief firm. They’ll navigate the IRS processes for you and help negotiate the final payment (lower amounts, set up a payment plan, file as “not collectible,” etc.). Those are all things you can do on your own, but only if you dig through the options and figure it out, which may be difficult. For their service, Optima will charge your dad a few thousand dollars. The idea is that their fee is less than what they negotiate on your behalf (so a net win for you). Whether or not you could have gotten the same result on your own without spending the money on Optima is hard to say.

Maybe call the IRS and see what the options are, then ask Optima where they see this heading and see which option is better for you.

Optima is a reputable company. But you still have to pay if you use their services, and it sounds like there’s not much extra cash for you dad.

https://www.nerdwallet.com/article/taxes/optima-tax-relief-review

What? No. You can totally talk to the IRS, and should, as they're the ones who know your situation. It looks like Optima is a tax service? You might owe them money for working with you, but they have no other power over you. All they are is a middle man that you were never under any obligation to use in the first place. If it were me, I'd figure out how to dump them and deal directly with the IRS.

As someone who used to do what Optima does, you can screw your dad by talking to the IRS direct. The IRS will try to get financial info from you, like expenses, etc. There are some expenses that require proof, and some that don't. For the expenses that don't require proof, there is a set number the IRS will give you if you ask. But if you say a lower number, the IRS will take that and not tell you you could have said a higher number. If you say a low number and Optima says the set number, IRS will say "sorry, taxpayer already told me that expense." Which could cause your dad to have to pay more money. I think Optima charges too much, but if you've already paid them, you might as well see it through and don't undermine what they're trying to do.

A lot of the people who are responding to you in this thread and upvoting comments in this thread have no idea what optima is. Your dad is right. It's questionable whether optima is actually worth the $4k you're paying them, but you've already paid $4k to retain a professional who deals with situations like this on a day to day basis. Let them deal with it, they'll do a better job than some armchair redditor who thinks that they'd be able to sweettalk the IRS into ignoring a debt.

I know you want to help your father but you can't handle this for him. The best thing to do would be to hook him up with a tax professional and for him to do what they say needs done. It sounds like he's picked Optima, so now he needs to work with them and it's on him to understand his options and what they're doing on his behalf.

I don't have any experience with Optima, but they advertise themselves as a tax relief & resolution company. Some quick research indicates that they are reputable.

Optima Tax Relief Review 2022: Pros, Cons and How It Compares

If your mom already signed something with Optima, then your father is likely committed to their fees. He should, of course, understand the breakdown of what he's paying. For example, is that $20k all taxes? What portion are back taxes and what portions are penalties & interest? Also, what are Optima's fees?

There's nothing wrong with using a service like Optima. Your dad was, essentially, operating his own business for 2018 and 2019. If he paid $0 taxes, then $20k owed over two years is not an unreasonable amount of money to owe. That's around $10k each year.

Working directly with the IRS is fine, but as I mentioned, if your dad has already signed paperwork with Optima, at least some of the fees have already been committed to. What you need to understand is where they are in the process, and what fees are yet to come.

Navigating back-tax issues can be confusing and difficult. While the folks here might be all to willing to go directly to the IRS, you should understand that it's your dad's responsibility to get his filing in order. The IRS won't do that for you.

Taxes are unavoidable. They cannot be discharged in a bankruptcy. Your dad will ultimately end up on a payment plan. If he doesn't make the payments, they'll garnish his wages. He's got to figure out a way to make ends meet. He doesn't have a lot of options at this point.

The IRS is actually pretty good to work with. As long as they see that you are putting in some effort they'll do the same. There is a lot of stigma against them but in my experiences it isn't warranted. If Optima is telling you not to work with them I'd want a good reason and a solid alternative path forward in writing.

My gut feeling is Optima is a waste of time and money. If anything find a tax accountant (not an online service) that specializes in trucking. But either way don't feel that you need to hide from the IRS when they reach out.

Tell your dad this is NOTHING like that. Talk to the IRS directly. If you owed them $40K for real, they'da been trying to take away your blood type already.

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One quick thing I thought of. If your dad would give you power of attorney, you can then speak to Optima and the IRS on your dad's behalf. POA doesn't have to be permanent. Your dad can give you POA for a short time to deal with all of this and then revoke it when it's over.

Sometimes the IRS will completely discount the amount owed based on an analysis that shows he will be unlikely to earn more than he earns now during his lifetime. It’s called an offer in compromise and it permanently settles a tax bill for good, for less than what is owed.

Please tell your dad not to stress too much because though this is a drag, In the scheme of things, a tax situation like this is manageable. It’s going to be OK.

And once you get the bulk of this done, you can save money by using the taxpayer advocate’s office for any future probs.

If he made about $80k per year, that would be about $6k in federal income tax and $12,000 in self employment (FICA; medicare/social security) taxes. So if that is about his income it sounds right. If he never filed then interest and penalties could be a significant part of the $20k, so you could owe that much even with significantly less income.

So the main thing he needs to do is find all his expenses for those years.

Because what is likely happening IRS gets a 1099 showing $150k revenue

But of that $150k he spent $100k on gas, vehicle maintenance. IRS lets you write off something like half of meals 50+ miles from home, etc.

But IRS doesn't know that. They just see $150k and send a massive tax bill for the full amount. He needs to adjust that and take all the deductions he can. This reduces the amount of tax, and then it reduces the amount of penalty and interest.

Make sure also they aren't reporting too much income IRS doesn't know about. If they say he has a tax debt they should send him the tax forms they prepare. Probably the part "Schedule C" is the main focus. Go over it with your dad and see it if makes senbse.