Beware of Tax Relief Scams and Understanding Your Options
The Internal Revenue Service (IRS) is issuing a cautionary reminder to taxpayers about the pitfalls of falling for schemes peddled by companies that claim they can settle tax debts for a fraction of the amount owed. Many of these promoters charge exorbitant fees without delivering results, preying on individuals eager to find a resolution to their tax liability issues.
Dubbed “mills,” these entities entice taxpayers with aggressive marketing tactics, promising guaranteed outcomes for significantly reduced settlements through the IRS’s Offer in Compromise (OIC) program. They may also falsely claim that there’s a limited opportunity to take advantage of this program.
“Taxpayers need to be vigilant against misleading aggressive marketing,” notes IRS Commissioner Danny Werfel. “Many of these mills not only demand hefty fees but also exploit taxpayers with unrealistic promises, resulting in wasted resources and dashed hopes.”
Understanding the Offer in Compromise Program
The Offer in Compromise (OIC) program is a genuine initiative by the IRS, designed to assist qualifying individuals to resolve their outstanding taxes for less than the total amount due. This program caters to those who cannot fulfill their tax obligations or those for whom payment would cause undue financial hardship. The IRS evaluates each case based on the taxpayer’s specific circumstances, including income and asset equity.
However, not all assistance in pursuing an OIC needs to come with a hefty price tag. While some legitimate services do exist to aid taxpayers in filing for an OIC, beware of entities making extravagant promises about debt settlement for minimal fees. These claims often lead to excessive charges for services that taxpayers could directly obtain from the IRS.
The IRS has consistently flagged such deceptive practices in its annual Dirty Dozen list, highlighting scams that threaten taxpayers with financial losses, data breaches, and more.
Exploring How to Learn More and Other Payment Solutions
Taxpayers can avoid falling victim to scams by directly seeking information on the OIC program through the IRS. The agency’s website offers comprehensive details, including an assessment of qualification criteria through the Offer in Compromise Pre-Qualifier tool and a new video series to educate individuals on scam awareness.
For those who may not qualify for an OIC, the IRS provides alternative payment arrangements, like installment agreements through the Online Payment Agreement (OPA) portal, allowing taxpayers to manage their debt over time.
Options include short-term payment plans for debts under $100,000 and long-term plans for balances under $50,000, with varying conditions and periods of up to 72 months.
Furthermore, taxpayers should be aware of the first-time penalty abatement policy—an administrative relief option for those who would otherwise incur penalization on their tax debt.
Reporting Scams and Seeking More Information
The IRS encourages the public to stay informed about tax preparation fraud and abusive tax schemes. Anyone suspecting fraudulent activities is urged to report them using the online Form 14242 or by sending the completed form to the IRS Lead Development Center.
Awareness and education are vital to combating these scams. Taxpayers equipped with the right information can better navigate their tax resolution options without falling prey to costly and ineffective schemes.
For additional details on payment plans, understanding your rights, and reporting tax scams, visit IRS.gov. If you are not sure it’s scam, reach out to us at [email protected]. We would love to help!