In April 2024, the IRS released its annual “Dirty Dozen” of tax scams. Included on that list were what the agency refers to as Offers in Compromise (OIC) tax mills. 

These OIC mills mislead taxpayers into thinking the companies can either make a tax debt disappear or are able to resolve a tax debt inexpensively. In reality, many of these mills have hidden fees and other costs that can end up costing taxpayers more than if they'd settled with the IRS. 

OICs 

The OIC program is a valuable part of the tax system. Taxpayers can apply for Offers in Compromise (OIC) when they're unable to pay the full amount of their unpaid taxes. 

If the IRS agrees to an OIC, the taxpayer pays less than the full amount to satisfy their tax debt. Taxpayers pay the agreed-upon amount as either a lump sum or as part of a payment plan. 

Eligibility 

Not everyone who applies for OIC qualifies. The program has specific eligibility criteria. The IRS makes OIC determinations on a case-by-case basis, recognizing that each taxpayer's situation is unique. 

In general, taxpayers are more likely to be approved for OIC when they are unable to pay the full tax bill, or paying the full tax bill will create an undue financial hardship.  

These OIC tax mills prey on individuals who might be unaware of the OIC program. They will often use exaggerated claims to hook unsuspecting taxpayers. They will then charge excessive fees or leave a taxpayer with a rejected OIC or a huge tax bill. 

Tax attorneys and other tax professionals can help taxpayers. They can provide one-on-one support and help taxpayers understand their different options for resolving a tax debt. OICs are not the only avenue for settling a tax debt. 

Qualified Tax Professionals 

When looking for a tax professional to help with a tax debt or other issue, taxpayers should take into account the following: