Each year, the IRS issues its infamous “Dirty Dozen” list. Prior awards have gone to micro-captives, syndicated conservation easements, and taxpayer identity theft. This year, the IRS added another abusive scheme: “Offer-in-Compromise Mills.” These tax debt resolution companies – which often advertise resolution of tax debts “for pennies on the dollar” – are the subject of this Insight.
IRS Offers in Compromise.
The Internal Revenue Code specifically permits the IRS to accept less than the full amount of a tax debt, which is referred to in tax parlance as an “offer in compromise.” Freeman Law has discussed offers in compromise in prior Insights (see Everything You Need to Know about IRS Offers in Compromise; A Fresh Start for Many? Economic Downturn Means an Upturn in Favorable Tax Settlements; A Fresh Start for Taxpayers: The Offer in Compromise; and The Art of IRS Collection Defense in a Post-COVID 19 World), and its attorneys have successfully represented a multitude of clients in resolving their tax debts through this and other collection alternative mechanisms.