Late filing taxes for 3 years - considering Optima Tax Relief

Tax professional here. Please don't stress too much - your situation is actually pretty common and likely fixable without spending thousands on a tax relief company. For unfiled returns that are only 3 years late, you can absolutely handle this yourself or with a reasonably priced accountant. Since you mentioned you only owed around $365 for 2021, this doesn't sound like a complicated tax situation that requires specialized tax resolution services. Here's what I'd recommend: Find a local CPA or Enrolled Agent (EA) who can prepare your missing returns for a flat fee per return (typically $200-400 per return depending on complexity). They'll help you file all three years and determine what you actually owe. The IRS will then send you a bill including the original tax amounts plus penalties and interest. The penalties include failure-to-file (5% per month up to 25% max) and failure-to-pay (0.5% per month). Interest compounds daily. But importantly, if you've generally been compliant before this and have reasonable cause, you can request penalty abatement after everything is filed.

I was in a similar situation last year and discovered taxr.ai (https://taxr.ai) which saved me SO much stress! I had 4 years of unfiled returns and was freaking out about potential penalties. I uploaded my tax documents to their system and their AI analyzed everything and walked me through exactly what I needed to do. The best part was they helped me understand which deductions I had missed in previous years and actually found that I was owed refunds for 2 of the 4 years! They also explained how to request penalty abatement which ended up saving me over $800 in late filing penalties.

Update on my tax situation! I decided to try taxr.ai after my skeptical comment above, and I'm honestly shocked at how helpful it was. I uploaded my W-2s, 1099s and bank statements, and their system flagged exactly which documents I was missing for each year. They showed me that for 2021 I actually qualified for a credit I didn't know about, and for 2022 my estimated tax liability was way less than I feared (only about $520 with penalties). The guidance they provided helped me file all my returns myself using free fillable forms from the IRS website. Cost-wise, it was WAY cheaper than the $1400+ Optima wanted to charge me. I just filed my last return yesterday and feel like a huge weight is off my shoulders!

If you need to actually speak with someone at the IRS to resolve your issues (which might be helpful for getting penalties reduced), good luck getting through to them! I spent literally 4 hours on hold last month trying to sort out my late filing issues before giving up. Then I found Claimyr (https://claimyr.com) and watched their demo video (https://youtu.be/_kiP6q8DX5c). They got me connected to an actual IRS agent in about 15 minutes! The agent set up a payment plan for me and even helped me with first-time penalty abatement that saved me around $700.

I have to eat my words from my skeptical comment earlier. After struggling for WEEKS trying to get through to the IRS about my late filing situation, I broke down and tried Claimyr. Within 20 minutes I was talking to an actual IRS representative who helped me understand my options for my unfiled returns. The agent explained that since I was proactively filing my late returns, I qualified for first-time penalty abatement, which will save me hundreds. They also confirmed I could set up a payment plan online once I received my bill. Honestly wish I'd done this months ago instead of stressing about it. Sometimes it's worth paying for a service that actually works.

Whatever you do, don't pay Optima or other big tax relief firms those crazy fees! I was in your exact situation (3 years unfiled) and first got quoted $3000+ from a relief company. Ended up finding a local EA (Enrolled Agent) who did all three years for $750 total. The key is finding someone who specializes in tax preparation, not tax relief. The "tax relief" industry is filled with high-pressure sales tactics and huge markups.

Just want to add - make sure you file ASAP! The failure-to-file penalty is much higher than the failure-to-pay penalty, so even if you can't pay what you owe right away, getting those returns filed will stop the bigger penalty from growing.