IRS Warns Taxpayers About Scams by Offer in Compromise Mills, IR-2024-243

The IRS has issued a warning to taxpayers to be cautious of unscrupulous promoters claiming to offer help in resolving unpaid taxes through the IRS Offer in Compromise (OIC) program. These fraudulent entities, often referred to as OIC mills, use aggressive marketing tactics and promise to settle tax debts for “pennies-on-the-dollar,” charging excessive fees with no results. IRS Commissioner Danny Werfel cautioned taxpayers about these deceptive practices, emphasizing that many OIC mills make empty promises and charge steep fees, leaving taxpayers worse off financially without resolving their tax issues.

The IRS’s Offer in Compromise program is a legitimate method for eligible taxpayers to settle their tax liabilities for less than the full amount owed. It is typically available to those who cannot pay their tax debt in full or would experience financial hardship by doing so. Eligibility is based on an individual’s financial situation, including income and equity in assets. Taxpayers can work directly with the IRS to resolve their debts without the need for third-party companies that often make misleading promises.

While some companies offer genuine assistance with OIC filings, others exploit taxpayers by charging excessive fees for services that can be done directly through the IRS. These OIC mills have consistently been listed on the IRS’s Dirty Dozen list of scams, putting both taxpayers and tax professionals at risk of losing money and sensitive personal information. The IRS advised taxpayers to learn more about the Offer in Compromise program and determine their eligibility. Taxpayers can use the IRS Offer in Compromise Pre-Qualifier tool or their Individual Online Account to check eligibility.

IR-2024-243