Beware of Offer in Compromise Mills

Resolve your tax debt for pennies on the dollar? Sounds pretty good right? Beware of these advertisements, they can be scams. The IRS warns taxpayers of this and other scams in its list of the “Dirty Dozen.”

According to the IRS website: “Offer in Compromise mills contort the IRS program into something it’s not – misleading people with no chance of meeting the requirements while charging excessive fees, often thousands of dollars.

‘We’re increasingly concerned that people having trouble paying their taxes are being duped into misleading claims about settling their tax debts for ‘pennies on the dollar’,’ said IRS Commissioner Chuck Rettig. ‘The IRS urges people to take a few minutes to review information on IRS.gov to see if they might be a good candidate for the program – and avoiding costly promoters who advertise on radio and television.’

The IRS reminds taxpayers to beware of promoters claiming their services are needed to settle with the IRS, that their tax debts can be settled for ‘pennies on the dollar’ or that there is a limited window of time to resolve tax debts through the Offer in Compromise (OIC) program.

An ‘offer,’ or OIC, is an agreement between a taxpayer and the IRS that resolves the taxpayer’s tax debt. The IRS has the authority to settle, or ‘compromise,’ federal tax liabilities by accepting less than full payment under certain circumstances. However, some promoters are inappropriately advising indebted taxpayers to file an OIC application with the IRS, even though the promoters know the person won’t qualify. This costs honest taxpayers money and time.

Taxpayers should be especially wary of promoters who claim they can obtain larger offer settlements than others or who make misleading promises that the IRS will accept an offer for a small percentage. Companies advertising on TV or radio frequently can’t do anything for taxpayers that they can’t do for themselves by contacting the IRS directly.

Taxpayers can go to IRS.gov and review the Offer in Compromise Pre-Qualifier Tool to see if they qualify for an OIC. The IRS reminds taxpayers that under the First Time Penalty Abatement policy, taxpayers can go directly to the IRS for administrative relief from a penalty that would otherwise be added to their tax debt.”

With this in mind, we recommend that if you are facing an audit you work with a tax professional like us. We understand the rules and will work with you and the IRS to come to realistic resolutions. Contact us today and find out if we can help.

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