The most effective scams will often have a small bit of truth to them which makes them appear legitimate.  The media is full of commercials for companies offering their services to reduce any income tax debt you may have for “pennies on the dollar.”  The truth is that the IRS does have an Offer in Compromise (OIC) program that provides for a method for qualifying taxpers to work with the IRS to settle debts for overdue taxes for less than the full amount for people who are unable to pay the full amount of the debrt or for those people who it would be a financial hardship to pay the full amount owed.  You don’t need the services of one of these companies that advertise their services to help you use the Offer in Compromise program and unfortunately, there are companies that charge excessive fees for their services.  These companies are referred to as OIC mills and, according to the IRS, using one of these companies puts you at risk of not only losing money, but also becoming a victim of identity theft.

According to IRS Commissioner Danny Werfel,“Taxpayers should be cautious of aggressive marketing that can mislead them. Many OIC mills charge steep fees, give false assurances and can take advantage of taxpayers with empty promises that their tax debt will disappear. The result is often good money paid for bad results.”

TIPS

A good place to start if you are interested in the Offer in Compromise program is to go to IRS.gov where you can learn about the OIC program and learn whether you qualify for the program.  You can also use the IRS’s Offer in Compromise Pre-Qualifier tool

If you don’t feel comfortable doing this on your own, you should consult with a certified public account or lawyer to assist you.

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