Dirty Dozen Tax Scams: Be Careful Of ‘Mills’ Pushing IRS Debt Solutions

Included in the yearly Dirty Dozen list of tax scams, the Internal Revenue Service (IRS) has once again issued a cautionary message to taxpayers regarding costly Offers in Compromise (OIC) “mills” that actively mislead taxpayers by falsely promising the elimination of their tax debts. These companies deceive taxpayers into thinking their tax debts can be resolved with large discounts, often charging excessive fees for services that could be obtained for free by using legitimate IRS tools like the Offer in Compromise Pre-Qualifier tool.

While the OIC remains a beneficial IRS program aiding taxpayers struggling with federal tax debts, it’s essential to note that certain companies provide legitimate services in this regard and could help you. Nonetheless, the IRS advises individuals to spare a few moments to review the resources on IRS.gov. By taking this approach, individuals can assess their eligibility for the OIC program and avoid engaging expensive promoters.

IRS Commissioner Danny Werfel cautioned taxpayers against falling for aggressive marketing tactics surrounding the Offer in Compromise program, which can be misleading and exploit vulnerable individuals with false promises of eliminating tax debt. While the program is legitimate, Werfel emphasized that it’s not suitable for everyone, as it entails specific eligibility criteria. He recommended that taxpayers begin by exploring the free resources available on IRS.gov to determine if they qualify for the program, thereby avoiding costly fees.

The fifth news release in the Dirty Dozen series highlights the focus on OIC mills. Since its inception in 2002, the IRS’ annual Dirty Dozen campaign has identified 12 scams and schemes posing risks to taxpayers and tax professionals, potentially leading to financial losses and compromising personal information. While the Dirty Dozen is not a legally binding document or a formal list of agency enforcement priorities, its primary purpose is to educate and raise awareness, thereby safeguarding taxpayers and tax professionals from prevalent tax scams and schemes.

Watch Out For Offer In Compromise Mill Scams

The Offer in Compromise (OIC) program, offered by the IRS, provides a legitimate avenue for eligible taxpayers to negotiate settlement of their tax debt for less than the full amount owed. This option is available to individuals facing financial challenges who cannot afford to pay their entire tax liability. Eligibility for the OIC is determined based on each taxpayer’s specific circumstances, and the agreement is made directly between the taxpayer and the IRS, without involving any third parties.

Taxpayers should exercise caution regarding OIC mills, as they frequently make exaggerated promises in radio and TV advertisements regarding the low-cost settlement of tax debts. In truth, these mills typically impose exorbitant fees, resulting in taxpayers paying for a service they could have accessed for free directly from the IRS.

It’s important to note that the IRS encourages individuals to take a few moments to review information on IRS.gov. By using the IRS’s Offer in Compromise Pre-Qualifier tool, individuals can determine if they might be eligible for the OIC program free of charge.

However, given that this tool serves as a general guide and may not be applicable to all taxpayers, such as partnerships and corporations, it is advisable to discuss your financial situation with an experienced tax attorney.

At Silver Law PLC, we offer assistance to taxpayers to resolve tax controversies. Contact us today for a thorough assessment of your circumstances and discuss your tax debt relief options.

Email: lchapman@silverlawplc.com
Website: taxcontroversy.com

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