If you owe taxes, stay clear of any company that claims it can settle your debt for a lot less. Instead, work directly with the IRS on a settlement, called an Offer in Compromise (OIC).

Settlement companies — known as OIC mills — can charge thousands of dollars in fees for advice that can be misleading. Along with the OIC mill’s fees, you could still owe the full amount, so you end up paying more than you owe on taxes.

The IRS website has resources to get you started.

  • Go to irsvideos.gov/oic to learn more about OIC.
  • See if you are eligible to submit an OIC to the IRS. Visit irs.treasury.gov/oic_pre_qualifier and use the OIC Tool.
  • Visit irs.gov/payments/penalty-relief to see if you qualify for penalty relief, which would help you avoid a penalty added to what you owe.