As someone who's been in small business accounting for over 15 years, I have to echo what everyone else is saying - the risks absolutely outweigh any potential benefits here. But I wanted to add a perspective that I haven't seen mentioned yet. Beyond the audit risks and penalties, there's another consequence that can be devastating: losing your business licenses and professional certifications. Many states have provisions that allow them to suspend or revoke business licenses for tax evasion. If you're caught underreporting income, you could literally lose the legal right to operate your repair shop. I've seen this happen to three different clients over the years. One was a small HVAC contractor who thought he was being smart by skimming about $18k annually in cash jobs. When the IRS caught him, not only did he face the typical penalties and interest (which totaled over $35k), but the state also suspended his contractor's license for 18 months. He essentially had to shut down his business completely during that period. The legitimate alternatives people have mentioned here are spot-on. I regularly help small repair businesses find $6-12k in annual tax savings through proper deductions and planning. The Section 199A deduction alone can be huge for service businesses - it's literally free money if you qualify and structure things correctly. My advice: invest in a tax professional who specializes in small service businesses. The cost is typically $1,200-2,000 annually, but the savings and peace of mind are worth many times that amount. Don't risk everything you've built for what amounts to a relatively small short-term cash flow benefit.

As someone who runs a small electrical repair business, I can't stress enough how much this thread has opened my eyes. I was honestly leaning toward the same approach @StellarSurfer originally asked about - the tax burden on small service businesses really is crushing, and cash jobs make underreporting seem tempting. But reading through everyone's real experiences, especially @Javier Torres's point about potentially losing business licenses, has completely changed my perspective. The idea that I could lose my contractor's license and have to shut down completely for 18 months is terrifying - that would destroy everything I've built over the past 6 years. What really convinced me was seeing the actual numbers people shared about legitimate tax savings. @Finnegan Gunn finding over $9,200 annually, @Malik Thomas saving $7,200, @James Martinez with $8,200 - these are all substantially more than what any of us were hoping to "save" through risky shortcuts. I'm particularly interested in the Section 199A deduction that keeps getting mentioned. As a sole proprietor, I apparently qualify for up to 20% off my business income, which could be huge. Plus all the vehicle expense deductions for traveling between job sites - I drive between customers constantly but never tracked it properly. The peace of mind factor everyone mentions really resonates too. Running a small business is stressful enough without adding the constant worry about potential audits or legal consequences. Time to invest in a proper tax professional and do this the right way. Sometimes the harder path really is the smarter path - thanks to everyone who shared their honest experiences here.

These holds are getting rediculous every year i stg. The IRS needs to get it together fr

Same situation here! Filed 1/18 through HR Block and got hit with the CTC verification hold too. They told me 6-8 weeks but seeing some people get theirs in 4 weeks gives me hope. Has anyone tried calling the IRS directly to get more info about the hold status? Getting tired of just waiting around with no real updates 😤

Carmen, you're absolutely not an idiot - these companies are predatory and specifically target people in stressful financial situations. The fact that you're taking action now shows you're being smart about protecting yourself. Here's my step-by-step recommendation based on what others have shared: 1) **Document everything immediately** - gather all contracts, payment records, emails, and notes from phone calls with Optima 2) **Send written termination notice** (email + certified mail) demanding immediate cancellation and an itemized list of actual services performed 3) **Contact your credit card company today** to dispute charges - explain that services were not rendered as promised 4) **File complaints with FTC, BBB, and your state attorney general** - this creates a paper trail and may help others The good news is you've already contacted a local EA/CPA, which is exactly the right move. They can often resolve IRS issues much faster and cheaper than these relief companies ever could. Don't let Optima string you along with more excuses. Be firm about cancellation and don't accept any "retention offers" - they're just trying to extract more money. You have consumer protection rights, especially if you paid by credit card. Stay strong - you're doing the right thing by getting out now before they take even more of your money.

Carmen, I'm so sorry you're going through this - you're definitely not alone, and the fact that you're taking action now shows real strength, not foolishness. Tax relief scams prey on people when they're most vulnerable and stressed. Here's what I'd add to the excellent advice already given: When you contact your local EA/CPA, ask them to request a transcript of your tax account from the IRS (Form 4506-T). This will show exactly what, if anything, Optima has actually filed on your behalf. Having this documentation will strengthen your case for credit card disputes and complaints. Also, many states have specific laws protecting consumers from deceptive tax relief practices. Your state attorney general's office may have additional remedies beyond just filing a complaint - some states can force these companies to provide refunds or face penalties. One more thing - if Optima tries to claim they've done substantial work when you cancel, demand they provide copies of all documents they've filed with the IRS and proof of submission. Most can't produce this because they haven't actually done the work they claim. You're taking all the right steps. The stress and frustration you're feeling is completely understandable, but you're protecting yourself and potentially helping others avoid the same trap. Keep pushing forward - you've got a whole community here supporting you.

Something nobody has mentioned yet - you'll need to pay self-employment tax (Medicare + Social Security) on this income too, which is about 15.3% ON TOP OF regular income tax. It really adds up! If you think you'll make more than $1000 in self-employment income in 2025, you should probably make quarterly estimated tax payments to avoid underpayment penalties next year.

I went through the exact same situation last year! The key thing to remember is that the $600 threshold for 1099-K forms is just when PayPal is required to send YOU the form - but you're required to report ALL income regardless of whether you get a form or not. Here's what I did in TurboTax: Go to the "Federal Taxes" tab, then "Wages & Income," and look for "Self-Employment Income" or "Business Income." You'll create a simple business for your art commissions. For the income amount, just add up all your PayPal payments from your transaction history - PayPal keeps good records that you can download. The silver lining is that you can deduct business expenses like art supplies, software, and even a portion of your internet bill against this income. Keep all your receipts! Also, since you made around $1,400 total ($800 PayPal + $600 from the 1099), you'll owe self-employment tax on that, but it's not as scary as it sounds when you factor in the deductions. Don't stress too much - you're doing the right thing by reporting everything honestly!

Check your wage and income transcript too. Sometimes employers report different numbers than what's on your W2

turbotax has been trippin this year ngl. saw like 5 posts about this same issue just today 💀