When a firm offers to eliminate your tax debt without knowing anything about you a red flag should go up. The IRS calls these unsolicited offers to eliminate tax debt Offer in Compromise "mills".
The IRS reports, "Offer in Compromise mills contort the IRS program into something it's not – misleading people with no chance of meeting the requirements while charging these people 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 avoiding costly promoters who advertise on radio and television."
Taxpayers can go to IRS.gov and review the Offer in Compromise Pre-Qualifier Tool to see if they qualify for an OIC. This is a free tool that determines if you would qualify for an offer in compromise and then provides two payment options to satisfy the tax debt.
The IRS reminds taxpayers that under the First Time Penalty Abatement policy, taxpayers can go directly to the IRS for administrative relief from a penalty that would otherwise be added to their tax debt.