OFFER IN COMPROMISE (OIC) \"MILLS2
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. OIC mills are a problem all year long but tend to be more visible right after the filing season ends, and taxpayers are trying to resolve their tax issues perhaps after receiving a balance due notice in the mail. These "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. They make outlandish claims, usually in local advertising, regarding how they can settle a person's tax debt for pennies on the dollar. The reality usually is that taxpayers pay the OIC mill a fee to get the same deal they could have gotten on their own by working directly with the IRS.
OIC mills are just one example of unscrupulous tax preparers. Taxpayers should be also wary of unscrupulous "ghost" preparers and aggressive promises of a bigger refund.
Ghost preparers. Although most tax preparers are ethical and trustworthy, taxpayers should be wary of preparers who won't sign the tax returns they prepare, often referred to as ghost preparers. For e-filed returns, the "ghost" will prepare the return but refuse to digitally sign as the paid preparer. By law, anyone who is paid to prepare, or assists in preparing federal tax returns, must have a valid Preparer Tax Identification Number (PTIN). Paid preparers must sign and include their PTIN on the return.
Inflated refunds. Not signing a return is a red flag that the paid preparer may be looking to make a quick profit by promising a big refund or charging fees based on the size of the refund. Unscrupulous tax return preparers may require payment in cash only and will not provide a receipt, invent income to qualify their clients for tax credits, claim fake deductions to boost the size of the refund, or direct refunds into their bank account, not the taxpayer's account.