With tax season under way, the IRS is once again warning taxpayers to be wary of “Offer in Compromise” scams. These promotions claim that they can help taxpayers pay back taxes for just “pennies on the dollar.” Victims often end up paying the promoters thousands of dollars in fees and still end up owing money to the IRS.
While the IRS’s Offer in Compromise program allows taxpayers to request a reduction in unpaid taxes, the guidelines are strict, and only a small percentage of applications are approved. To be eligible for the program, you must be up to date on your tax returns and have received at least one bill from the IRS. You’ll be required to provide supporting documents, including a breakdown of your expenses. The IRS will then review your income and the assets you own, such as equity in your home, to determine whether you’re eligible to have some of your tax debts forgiven. If it determines that you can afford to repay your taxes in full through an installment program, it will likely reject your offer.
You can find out if you prequalify for the OIC program by going to https://irs.treasury.gov/oic_pre_qualifier. The IRS charges a $250 application fee but waives it for low-income taxpayers.
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Bank impersonation scams. Consumers also need to be on the lookout for con artists who claim to be fraud officers from their bank. Here’s how it works: You receive a fraud alert via text or e-mail asking you to verify a purchase you didn’t make. Respond “no” and you’ll receive a phone call from a fraud impersonator requesting personal information, such as your username and password, in order to “catch” the scammer. The imposter then uses that information to drain your account. Never give out sensitive information over the phone or send money to people you don’t know. Hang up and contact your bank if you’re not certain a call is legitimate. While your bank may ask you to verify your identity or account information, this usually happens when you initiate the call.
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