In April 2024, the IRS released an alert as part of their Dirty Dozen campaign warning taxpayers of “Offers in Compromise” (OIC) mills, a type of abusive tax scheme in which these “mills” promote false programs to supposedly make targets’ tax debts disappear.
“Offer in Compromise” is a real program offered by the IRS to help taxpayers pay their federal tax debts, meant specifically for those who cannot afford to pay the full amount. However, many taxpayers do not qualify for it, and “mills” promote the program to those who are ineligible, costing them thousands of dollars in fees and fines. You can check if you are eligible for the OIC by using the IRS Pre-Qualifier tool.
Indicators of OIC Mills
- Outlandish or exaggerated language: OIC mills or those who run them will usually make magnified statements on radio or TV ads to promote themselves, making false claims that they can resolve an individual’s federal tax debt quickly and cheaply.
- Excessive fees: Fraudsters will offer their services at a high price, swindling targets of their money without any real OIC program, putting them further in debt.
Blowing the Whistle on OIC Schemes
- As part of the Dirty Dozen campaign, the IRS encourages individuals to report any abusive tax schemes, including Offers in Compromise mills.
- Taxpayers and tax practitioners may report violations to the IRS Whistleblower Office and may be eligible to earn significant monetary awards.
- Individuals are encouraged to mail or fax a completed Form 14242, Report Suspected Abusive Tax Promotions or Preparers to IRS Lead Development Center in the Office of Promoter Investigations.
Whistleblowers seeking legal advice may contact Kohn, Kohn & Colapinto for a consultation.
