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The material on this website is provided to the general public and is for informational purposes only. Information contained herein does not reflect the opinion of Paley & Prehn, PLC and should not be relied upon as legal advice. You should consult an attorney for advice regarding your individual situation. Contacting us does not create an attorney-client relationship. Should you wish to hire an attorney at Paley & Prehn, PLC to represent you, you must first sign an agreement for legal services.
What’s an Offer in Compromise (OIC)?
An Offer in Compromise (OIC) is a program offered by taxing authorities such as the Internal Revenue Service, Franchise Tax Board, and California Department of Tax and Fee Administration, where a taxpayer may be able to settle their tax bill for less than what is owed or if they don’t owe the tax at all.
What is an OIC Mill?
OIC mills are businesses (often tax resolution companies) that aggressively advertise misleading promises to settle taxpayers’ debts for less than what they owe. These companies often charge high, non-refundable upfront fees that are supposed to cover their services to “negotiate” with the IRS on your behalf. But many times, these companies just submit offers for clients who don’t qualify for the program, which can result in the IRS rejecting the offer, leaving the person still in debt—and out of the money they paid to the company.
Why They’re on the IRS Dirty Dozen List—Again
The first time the OIC mills appeared in the Dirty Dozen list was in 2020. This inclusion was made to caution taxpayers against firms that falsely claim to settle tax debts for much less than owed, often leading to expensive fees without delivering the promised results.
The problem is that OIC mills often don’t properly evaluate if a person is eligible for an offer before charging high fees. The IRS has strict guidelines for accepting an Offer in Compromise, and most people won’t qualify unless they truly cannot pay their full tax debt. So, these companies are taking advantage of people who are facing significant financial challenges and are looking for straightforward solutions to their tax issues.
How to Spot an Offer in Compromise Mill
Big Promises, Zero Reality
“Settle for pennies on the dollar!” If it sounds too good to be true, it’s because it is. The IRS doesn’t hand out discounts just because someone asks for them.
Upfront Fees
Any company asking you for a big upfront payment to “deal with the IRS” is a major red flag.
High-Pressure Sales Tactics
If the company is pushing you to sign up fast, it’s a scam.
How Paley & Prehn Can Help You
If you’re considering an Offer in Compromise, it’s best to consult a qualified tax professional. We can assist you through this process and ensure you explore the best options for your situation.