The Tax Times: IRS ‘Dirty Dozen’ List Warns People About Offer in Compromise ‘Mills’ - Call M&A for Real & Experience Tax Attorneys!

Wednesday, June 30, 2021

IRS ‘Dirty Dozen’ List Warns People About Offer in Compromise ‘Mills’ - Call M&A for Real & Experience Tax Attorneys!

WASHINGTON – The Internal Revenue Service continued its “Dirty Dozen” tax scams with a warning for people to watch out for predators using tax-related schemes ranging from fake charities to scams targeting seniors and immigrants.

The IRS continues to see a group of ruses by dishonest people who trick others into doing something illegal or which ultimately causes them harm. Predators encourage otherwise honest people to do things they don’t realize are illegal or prey on their good will to take something from them.

Here are five of this year’s “Dirty Dozen” scams. 1. Fake charities, 2. Immigrant/senior fraud 3. Seniors beware, 4. Offer In Compromise ‘Mills’ and 5. Unscrupulous Tax Return Preparers.

Offer In Compromise ‘Mills’

Offer in Compromise mills contort the IRS program into something it’s not – misleading people with no chance of meeting the requirements while charging excessive fees, often thousands of dollars.

“We’re Increasingly Concerned That People Having Trouble Paying Their Taxes Are Being Duped Into Misleading Claims About Settling Their Tax Debts For ‘Pennies On The Dollar’,” Said IRS Commissioner Chuck Rettig.

The IRS urges people to take a few minutes to review information on IRS.gov to see if they might be a good candidate for the program and Avoid Costly Promoters Who Advertise On Radio And Television.”

The IRS Reminds Taxpayers To Beware Of Promoters Claiming Their Services Are Needed To Settle With The IRS, That Their Tax Debts Can Be Settled For “Pennies On The Dollar”
or That There Is A Limited Window Of Time To Resolve Tax Debts Through (OIC).

An “offer,” or OIC, is an agreement between a taxpayer and the IRS that resolves the taxpayer's tax debt. The IRS has the authority to settle, or "compromise," federal tax liabilities by accepting less than full payment under certain circumstances. However, some promoters are inappropriately advising indebted taxpayers to file an OIC application with the IRS, even though the promoters know the person won’t qualify. This costs honest taxpayers money and time.

Taxpayers should be especially wary of promoters who claim they can obtain larger offer settlements than others or who make misleading promises that the IRS will accept an offer for a small percentage.

Companies Advertising On TV Or Radio
Frequently Can’t Do Anything For Taxpayers ...

For more information about Tax Relief Companies see the information on fake charity scams on the Federal Trade Commission web site detailing how Tax relief companies use the radio, television and the internet to advertise help for taxpayers in distress. If you pay them an upfront fee, which can be thousands of dollars, these companies claim they can reduce or even eliminate your tax debts and stop back-tax collection by applying for legitimate IRS hardship programs.

The truth is that most taxpayers don't qualify for the programs these fraudsters hawk, their companies don't settle the tax debt, and in many cases don't even send the necessary paperwork to the IRS requesting participation in the programs that were mentioned. Adding insult to injury, some of these companies don't provide refunds, and leave people even further in debt.

The majority of tax settlement companies charge their clients an initial fee that can easily run anywhere between $3,000 to $6,000, depending on the size of the tax bill and proposed settlement. In most cases, this fee is completely nonrefundable. This fee quite often mysteriously mirrors the amount of free cash the client has available. This is generally the amount of cash the company says it will save the client in tax payments.

Clients have also complained to the Better Business Bureau (BBB) and the Federal Trade Commission (FTC) that some of these firms have not produced any of the promised results and, in fact, the organization was a scam. Many firms also materially misrepresent their fees to clients, perhaps charging them initially with a lower fee before coming back for more once they are deeply involved in the process.

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